Industry stakeholders have expressed differing opinions over the Central Bank of Nigeria’s (CBN) decision to discontinue its direct intervention financing for the manufacturing sector, with some warning that the move could further constrain industrial growth while others insist the apex bank should concentrate on its core monetary policy responsibilities.
The Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, said the withdrawal has forced manufacturers to rely almost entirely on commercial banks, which she argued are not designed to provide the long-term financing required for industrial expansion.
According to her, ending intervention financing without introducing a credible alternative has left manufacturers exposed to a credit market that is unsuitable for sustainable industrial development.
She noted that channeling development finance through commercial banks has weakened the concessional advantages previously enjoyed under intervention programmes, discouraged lending to small and medium-scale manufacturers, and contributed to a decline in industrial credit.
Although she expressed optimism that the Lagos State Industrial Policy and the National Industrial Policy could stimulate fresh investments, Almona stressed that implementation rather than policy announcements would determine whether investors regain confidence in the manufacturing sector.
She urged the Federal Government to immediately release the proposed ₦1 trillion Manufacturing Stabilisation Fund, recapitalise the Bank of Industry (BoI) with SME-focused credit guarantee schemes, review the Cash Reserve Ratio (CRR) to improve liquidity within the banking sector, and strengthen coordination between fiscal and monetary authorities.
“Nigeria cannot industrialise on promises,” she said, warning that only effective implementation of government policies would determine whether the country experiences industrial recovery or prolonged stagnation.
Also reacting, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, described access to affordable financing as one of the most significant obstacles facing manufacturers.
He argued that increased government borrowing at interest rates approaching 20 per cent has crowded out private sector borrowers, making it increasingly difficult for manufacturers to obtain affordable loans.
Yusuf explained that while short-term credit facilities may address working capital requirements, investments in factories, machinery and other production infrastructure require long-term financing at competitive interest rates.
He therefore called on the Federal Government to strengthen the Bank of Industry by recapitalising it to provide manufacturers with long-term loans at single-digit interest rates.
In contrast, former Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. John Isemede, backed the CBN’s decision to withdraw from direct intervention financing.
He maintained that the apex bank should focus exclusively on its statutory responsibility of formulating and implementing monetary policy rather than engaging directly in development financing.
According to Isemede, previous intervention programmes exposed the limitations of central bank-led industrial financing, adding that institutions such as the Bank of Industry, working in collaboration with commercial banks, are better positioned to provide sustainable industrial credit.
He also advocated stronger alignment between fiscal and monetary policies, improved incentives for exporters and the implementation of a comprehensive industrial development roadmap.
Isemede stressed that meaningful and sustainable growth in Nigeria’s manufacturing sector would only be achieved through coordinated reforms across the entire industrial value chain rather than isolated financing interventions.
