Despite the avalanche of funding windows rolled out by the Federal Government through the Central Bank of Nigeria (CBN) to address the credit challenge of operators in the real sector particularly manufacturers, only about 20 per cent of the funds has been accessed by manufacturers till date.
The immediate past President, Manufacturers Association of Nigeria (MAN), Engr. Mansur Ahmed, who made this known in Lagos, said “This situation calls for deliberate effort to make the funds accessible to manufacturers, especially at this period of global economic difficulty.”
According to Mansur, operators in the Nigerian manufacturing sector have been contending with inadequate credit supply and high cost of borrowing for so long, and this, he lamented, has grossly affected investment and utilization of available capacity in the sector.
Mansur, while commending the Federal Government for always making efforts at solving the credit challenge of the sector through the various CBN funding windows, however, said till date, only about 20 per cent of the funds has been accessed by manufacturers.
The manufacturing sector’s performance has been constrained by the harsh macroeconomic environment in Nigeria, with the sector persistently suffering low-price competitiveness due to the high-cost business environment.
However, to help encourage continuous improvements in growth in the manufacturing sector, including of course, the agricultural sector, the CBN rolled out various intervention funds or development funding windows at liberal lending rate (single digit).
For instance, there was the N1 trillion COVID-19 stimulus facility to boost local manufacturing and production across critical sectors.
There was also the N100 billion, which was later increased to N200 billion, intervention fund for the pharmaceutical manufacturing companies and healthcare practitioners meant to expand and strengthen the capacity of healthcare institutions.
Others included the N50 billion revival fund for the textile industry, and the N10 billion intervention fund to the Kano State Government to revive industries in the state.
The CBN, through the Bank of Industry (BOI), also provided N235 billion intervention fund for re-financing and restructuring of banks’ loans to the manufacturing sector.
But, speaking at the recent second Adeola Odutola Lecture in commemoration of the 50th Annual General Meeting (AGM) of MAN, Mansur affirmed that despite the availability of these funds, manufacturers have not been able to access them fully as only about 20 per cent has been accessed by manufacturers till date.
The Nation learnt that manufacturers’ inability to access such CBN funding windows stemmed from the high interest rate and requirements by Participating Financial Institutions (PFIs) like commercial and development banks who manage the funds.
This must be why manufacturers have been clamoring that the CBN ensures that PFIs grant manufacturers transparent and effective access to the available intervention funds, and banks who fail to disburse the allocated funds should be sanctioned.
Manufacturers also want to be made part of the monitoring process by the CBN.