Manufacturing, agric sector face up to 60% in interest rates
Manufacturers and operators across Nigeria’s productive sectors, including agriculture and food processing, are facing lending rates of up to 60 percent, according to the latest deposit and lending rate report released by the Central Bank of Nigeria (CBN).
The report, covering January 2 to February 6, 2026, shows that while deposit rates remained largely stable, maximum lending rates increased significantly across several banks and sectors critical to food production and agro-industrial activity.
Stanbic IBTC recorded the highest lending ceiling at 60 percent, applicable to sectors such as agriculture, forestry and fishing, manufacturing, mining and quarrying, finance, information and communication, and professional services.
Other banks also posted elevated rates affecting agri-food value chains. FCMB applied lending rates as high as 46.10 percent across agriculture and manufacturing, while Polaris Bank recorded 47.31 percent in the manufacturing sector. Ecobank Nigeria posted 48 percent in administrative and support services linked to production activities.
The development reflects tightening credit conditions for businesses already managing rising energy costs, exchange rate volatility and weak consumer demand.
Meanwhile, deposit rates remained relatively unchanged. Savings deposit rates averaged 8.10 percent across most banks during the period, with First Bank of Nigeria offering 8.25 percent and Globus Bank 8.18 percent.
Prime lending rates — typically reserved for top-tier borrowers — stayed around the mid-20 percent range, with Zenith Bank slightly reducing its rate to 24.23 percent while Access Bank maintained 25.50 percent.
Several institutions also raised lending ceilings further. Nova Bank increased its maximum lending rate to 33.56 percent, and FSDH Merchant Bank raised its ceiling to 30 percent.
Source: BusniessDay
EXPERT REVIEW FOR AGRI-FOOD STAKEHOLDERS
Nigeria’s rising lending rates signal a shift from financing-driven expansion toward liquidity-constrained agricultural production, with implications for output stability, food prices and value-chain structure.
- Working capital financing becomes the sector’s biggest constraint
Most farmers, aggregators and processors rely on short-term credit to purchase inputs and inventory. At interest rates above 40 percent, production cycles shorten and scale declines as businesses avoid holding stock. - Processing capacity utilisation will decline
Food processors operate on inventory turnover. High borrowing costs make storage and bulk procurement uneconomical, encouraging order-based production and increasing seasonal shortages. - Informal market actors gain dominance
As formal bank credit becomes unaffordable, traders and cash financiers replace structured off-takers, weakening traceability systems and disrupting organised supply chains. - Food inflation becomes structurally embedded
Financing cost becomes part of production cost. Even if general inflation slows, food prices remain elevated because the cost of producing food remains high. - Only capital-strong operators retain expansion ability
Integrated farms, exporters earning foreign exchange, and businesses backed by development finance institutions will continue expanding, while SME agribusinesses shift to survival-scale operations.
Conclusion
The current interest rate environment effectively taxes food production. Without accessible working-capital financing, Nigeria’s agricultural growth will slow not because of land or inputs, but because production cannot be funded at scale. Addressing food inflation in 2026 will therefore depend as much on financial policy as on agricultural policy.
