Economy: Coleman predicts CBN rate cuts
…Calls for stronger support for manufacturing, agriculture
Managing director of Coleman Technical Industries Limited, George Onafowokan, has predicted a gradual reduction in Nigeria’s interest rates in the coming months, while calling for stronger government support for manufacturing, agriculture and trade to accelerate economic growth and job creation.
Onafowokan, who spoke in an interview, backed the Central Bank of Nigeria (CBN)’s decision to retain the Monetary Policy Rate at 26.5 per cent, describing the move as a necessary balance between controlling inflation and maintaining macroeconomic stability.
According to him, the current monetary policy stance is appropriate for the moment, but may not be sustainable for much longer as economic conditions improve. “In my own opinion, we are still striking the right balance, but I don’t see the current rate being maintained for much longer,” he said.
The Coleman boss predicted that the Monetary Policy Committee could begin easing rates within the next two meetings, possibly by 0.25 or 0.5 percentage points, if the stability recorded in the foreign exchange and liquidity markets is sustained.
He, however, stressed that monetary policy alone could not deliver the economic transformation Nigeria needs, insisting that fiscal authorities must complement the CBN’s measures with policies that stimulate production and investment.
“The economy is not controlled by monetary policy alone. Fiscal policy is equally important. We have to give the new team time because economic corrections do not happen overnight,” Onafowokan said, expressing optimism over recent changes in the economic management team.
He said Nigeria was gradually moving in the right direction after about three years of difficult macroeconomic adjustments, adding that strategic appointments in the ministries of Finance, Industry, Trade and Investment, and Power could help create a more coordinated approach to economic management.
Onafowokan, however, warned that achieving the Federal Government’s ambition of building a $1 trillion economy would require deliberate incentives for productive sectors capable of creating jobs on a large scale.
He identified manufacturing, agriculture and trade as the sectors with the greatest capacity to generate mass employment, arguing that the country must move beyond dependence on sectors such as oil and gas, ICT and finance, which, despite attracting substantial investment, have comparatively lower employment capacity.
“The majority of jobs will come from manufacturing, agriculture and trade. Agriculture cannot grow without manufacturing because value addition is what creates wealth and employment,” he said.
According to him, raw agricultural commodities such as cassava, palm kernel and eggs can generate significantly greater economic value when converted into finished and semi-finished industrial products. He therefore urged policymakers to strengthen the link between agriculture and manufacturing through incentives, infrastructure and affordable financing.
Onafowokan also criticised the rising cost of funds available to manufacturers, particularly the recent increase in lending rates by the Bank of Industry.
He argued that development finance institutions should focus on providing patient, long-term capital rather than operating at rates comparable to commercial banks.
“The Bank of Industry exists to promote industrial development, not maximise profits. It should provide patient capital for seven to eight years to enable businesses expand and create jobs,” he said.
He called on the CBN and Ministry of Finance to strengthen the funding capacity of development banks, particularly the Bank of Industry, so that manufacturers and small businesses can access affordable long-term financing. He also identified energy costs as another major threat to industrial competitiveness, revealing that Coleman had invested more than $20 million in gas-powered electricity generation to sustain its operations.
The Coleman boss said manufacturers that had invested heavily in their own power generation should not be burdened with gas prices as high as $8.70 per thousand standard cubic feet. He advocated a significantly lower domestic industrial gas price of about $3.50 per thousand standard cubic feet, arguing that cheaper gas would reduce production costs, encourage expansion, create jobs and improve Nigeria’s export competitiveness.
He commended Federal Government reforms in the power sector, including the decentralisation of electricity generation and incentives for gas-powered equipment, but said gas pricing remained a critical policy gap. Looking ahead, he said sustained investor confidence would depend on policy consistency and political stability, particularly as Nigeria approaches another election cycle. While acknowledging growth in portfolio investment, he urged greater focus on foreign direct investment and, especially, domestic direct investment. “I am a stronger believer in domestic direct investment because it shows local businesses are expanding. If government maintains policy consistency, I see steady GDP growth and sustained economic expansion,” he said.
He maintained that sustained reforms, combined with stronger fiscal support for productive industries, could put Nigeria firmly on the path to industrialisation and long-term economic expansion.
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