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LAGOS – The withdrawal of the Central Bank of Nigeria (CBN) from direct intervention financing, coupled with delays in implementing the proposed N1 trillion Manufacturing Stabilisation Fund, has deepened concerns among manufacturers, with industry leaders warning that expensive commercial loans are stifling investment, job creation and industrial competitiveness.
They argue that unless the Federal Government urgently restores access to affordable long-term financing and aligns monetary and fiscal policies, Nigeria’s ambition to build a globally competitive manufacturing sector could remain elusive.
They pointed out that restoring confidence in manufacturing will require more than policy declarations, insisting that affordable long-term financing, stronger development finance institutions, effective policy implementation and coordinated economic reforms are essential to unlock fresh investment, create jobs and improve the competitiveness of Nigeria’s manufacturing sector.
Dr. Chinyere Almona, Director General of the Lagos Chamber of Commerce and Industry (LCCI), said the CBN’s exit from direct intervention financing has left manufacturers dependent on commercial banks that were never structured to provide long-term industrial funding.
According to her, withdrawing direct intervention financing without providing a viable alternative has forced manufacturers into a credit market that does not support industrial development.
She explained that routing development finance through commercial banks as risk-bearing intermediaries has weakened the intended concessional benefits, discouraged lending to small and medium-sized enterprises and resulted in deeply negative industrial credit growth.
Almona expressed optimism that the recently launched Lagos State Industrial Policy and the National Industrial Policy could stimulate industrial investment but stressed that policy announcements alone would not restore confidence.
She said confidence would only return when the government delivers on its promises through the immediate release of the N1 trillion Manufacturing Stabilisation Fund, expanded funding for the Bank of Industry backed by SME-focused guarantees, a review of the Cash Reserve Ratio to unlock bank liquidity and stronger coordination between monetary and fiscal authorities.
According to her, recent reductions in the Monetary Policy Rate should translate into genuinely affordable lending rates for manufacturers.
“Nigeria cannot industrialize on promises,” she said, adding that effective execution would determine whether the country experiences industrial stabilization or prolonged stagnation. Also speaking, Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), identified access to affordable credit as one of the biggest obstacles confronting manufacturers.
He said manufacturers are increasingly unable to compete for funds because government borrowing from the financial market at interest rates approaching 20 percent has crowded out the private sector.
“It is not easy for manufacturers to compete for credit in the financial market alongside government borrowing,” Yusuf said, noting that the situation has significantly increased financing costs for productive enterprises.
He added that manufacturers also struggle with the short tenure of available loans, explaining that while working capital can be financed over shorter periods, investments in machinery, factory construction and production facilities require long-term financing that allows businesses sufficient time to generate returns.
According to him, the proposed Manufacturing Stabilization Fund was designed to bridge these financing gaps.
Yusuf said if the intervention fund is not released, the government should urgently recapitalise the Bank of Industry to provide manufacturers with long-term loans at single-digit interest rates.
“What we’d like to see is for the government to strengthen our development finance institutions to provide these facilities at a cost that will make manufacturing competitive in the Nigerian economy,” he said.
Offering another perspective, industry stakeholder, Dr. John Isemede, former Director-General of Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), argued that the Central Bank should concentrate on its core mandate of monetary policy rather than direct intervention programmes.
He said previous intervention initiatives, including the Anchor Borrowers Programme, highlighted the challenges associated with the apex bank’s involvement in development financing.
According to him, development finance should be handled by institutions such as the Bank of Industry and commercial banks, while the central bank focuses on creating a stable monetary environment.
Isemede also criticised policies affecting exporters, saying they have weakened export-oriented manufacturers and compelled some businesses to shift operations to neighbouring countries.
He stressed that monetary policy must work in harmony with fiscal policy and be complemented by incentives that support production, marketing and exports.
Beyond financing, he called for a comprehensive industrial roadmap, questioning the country’s long-term strategy for manufacturing development and urging stronger coordination among relevant government agencies.
He advocated what he described as “CCC”—central coordination, cooperation and communication— as critical pillars for rebuilding the manufacturing sector and reducing Nigeria’s dependence on imports.
Isemede further argued that access to finance represents only one aspect of the industry’s challenges, noting that manufacturers also contend with unreliable power supply, high production costs, multiple taxes, logistics bottlenecks, expensive bank lending rates, inadequate incentives and competition from cheaper imports.
He maintained that manufacturing requires coordinated reforms across the entire production value chain rather than isolated financial interventions if Nigeria hopes to achieve its aspiration of becoming a one-trillion- dollar economy.
