Nigerian Bakers Face Crisis from High Lending Rates

Bakers in Nigeria are facing severe challenges due to high lending rates and rising energy costs, which are threatening the survival of their businesses. The Premium Breadmakers Association of Nigeria (PBAN) reported that commercial banks are charging interest rates between 33 and 34 percent on loans, despite a recent reduction in the Central Bank of Nigeria’s (CBN) Monetary Policy Rate from 26.5 percent to 23 percent.

Emmanuel Onuorah, President of PBAN, revealed that about 40 percent of its members have been lost over the past two years due to these harsh conditions. He shared his experience of seeking a N12 million loan for a solar energy project, which came with a 34 percent interest rate and a requirement for 20 percent counterpart funding.

Onuorah criticized financial institutions, particularly the Bank of Industry, for not adequately supporting genuine entrepreneurs. He also mentioned that switching to alternative energy sources would require significant investment, which many operators cannot afford without government assistance.

Hadijat Olopade, Chairman of the Organising Committee of PBAN Day-Out, echoed these concerns regarding profitability in the bakery sector.