FG Banks on Long-term Credit to Achieve Manufacturing Target
Omolabake Fasogbon
The federal government has set a 20 per cent manufacturing growth target by 2030-2031 under the Nigerian Industrial Policy (NIP), banking on long-term financing to drive the expansion.
Presently, manufacturers struggle to obtain long-tenor financing well described as a major lifeline to sustain industrial investments which often take years to mature.
Minister of State for Industry, Trade and Investment, Senator John Owan Enoh while speaking at Ministerial Roundtable 2 of the Industrial Revolution Work Group (IRWG) themed:”Affordable Long-Term Finance & Building: The Capital Architecture for Industrial Growth and MSME Inclusion,” stated that unavailability of suiting facility is fuelling investors apathy in productive sector, also behind it lingering around eight to nine per cent in more than a decade.
He said the unattractiveness of manufacturing in terms of credit terms is driving investors more into trading, calling on finance house to reverse this trend by offering right facility with extended repayment period.
According to him, a financing befitting of manufacturers is such that allow them invest in equipment, expand production and keep borrowing costs low enough to maintain competitive prices.
He said,“Our manufacturers do not lack ambition, orders, markets or even money. The challenge is accessing the right financing at the right price and tenor, and getting the right capital structure into the factories.”
Also, Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele informed that commercial banks’ credit to the manufacturing sector shrinked by about N1.9 trillion in 2025, representing a decline of more than 22 per cent from N8.5 trillion to N6.61 trillion.
Oyedele worried that a present situation where manufacturers borrow at a prime rate of 27 per cent with maximum rates reaching mid-30 per cent range remains a threat for investments requiring seven, 10 or 15 years to deliver returns.
He emphasised therefore that it is crucial this moment that stakeholders, including government, regulators, development finance institutions and commercial capital providers to approach constraints from individual perspective, toward a more coordinated financing framework.
Also speaking, Permanent Secretary, Federal Ministry of Industry, Trade & Investment (FMITI) , Dr Chris Isokpunwu represented by the Director of Industrial Development Department, Mohammed Bala maintained that affordable and patient capital remained a major constraint to investment in machinery, technology, export production and industrial competitiveness.
