The inclement macroeconomic environment in Nigeria has constrained the performance of the manufacturing sector. Particularly, with the triadic rates: high and rising inflation rate, double digit lending rate and unfavourable exchange rate parity. The regulatory environment is harsh and induces high business operating cost in the economy. There is also infrastructure deficit which our businesses contend with.


As a result of the high cost business environment, the manufacturing sector has persistently suffered low-price competitiveness as plethora of close substitute to Nigerian manufactured products are officially imported into the country while some others are smuggled in through the land borders.


In order to assuage the high cost manufacturing environment and improve the competitiveness of Nigerian manufactured products, funding at liberal lending rate (single digit) became critical.  This explains why the Central Bank of Nigeria (CBN) created several development funding windows with “single digit” interest rates to support real productive businesses including manufacturing.


However, notwithstanding the availability of these funding windows, manufacturers still suffer the dual challenges of scarcity of investible funds and high lending rate.  


For instance, the N1Trillion COVID-19 Stimulus for Manufacturing and Import    Substitution, 2020, a stimulus that was aimed at sustaining the manufacturing and improving   output of the sector.  

The stimulus is based on the following terms;

? Based on activities, loan shall not exceed N10 billion per obligator

? Working capital of maximum of N2 billion per obligator

? Refinancing facility of maximum of N15 billion per Obligator

? Interest Rate of 5% till 20 February 2021and expected to revert to 9% thereafter (this was recently extended);

? The stimulus package is managed by Participating Financial Institutions (PFIs) which includes Commercial Banks and Development Bank.


Generally, MAN observed through feedbacks from members and interaction with the CBN on several occasions that these facilities and funds have not been adequately accessible to manufacturers due mainly to the prevarication of the PFIs and MDBs.


MAN, while acknowledging the excellent initiative of the CBN in setting up the N1 trillion COVID-19 stimulus facility for manufacturing and import substitution, observed    that most of its members who applied were not able to get it.  According to the CBN, only 76 companies have received N300 billion, which translates to 30%, in one year. Intriguingly, according to our members, the banks are claiming that they have not received the framework for the administration of the facility from the CBN.




The scheme is yet another intervention of the apex bank that is set against the backdrop of the forex squeeze that was aggravated by the fall in oil prices and the COVID-19 Pandemic since the first quarter of 2020. The CBN, probably in a bid to avoid the full blown devaluation of the Naira, has made several policy statements and issued several circulars, albeit with some flip-flops, in the management of the country’s foreign exchange.


The CBN had implemented measures that focused on addressing the downturn in dollar inflow by constraining forex demand, including the list of some items not valid for forex which we indicated negatively impacted some of our sectors. This latest measure suggests that the CBN is taking a closer look at forex supply, incentivizing it through diaspora dollar remittances to ramp up supply and help stabilize the forex situation of the country. I believe that the CBN will work with the IMTOs and the deposit money banks to deal with the remittance infrastructure challenges, as well as the cost.


In the face of it, the scheme should encourage Nigerians working abroad to remit more into Nigeria and thereby improve the forex inflow. However, we need to dimension the inflows which has historically been 70% for family support and 30% for other purposes, including real estate which carries the greater part. In order to yield more of the anticipated inflow for investment in productive activities, the CBN would have to work with the Banks and other relevant government agencies to initiate portfolios and measures to point the remitters in that direction.


Having said that, there is also the need to consider where the domestic foreign exchange earners stand within the context of this scheme. For instance, could a manufacturer who exports his product and repatriates his dollar profit, get his money in dollars and also benefit from the Dollar 4 Naira Scheme? This way, you can guarantee almost a 100% re-investment in production and reap all the attendant benefits and even partly make-up for the losses incurred as a result of the poor implementation of the EEG.  The average manufacturer who is confronted with a lot of infrastructure and macroeconomic challenges is eminently qualified, if not more qualified, to benefit from such a scheme.



No doubt, development funds are critical to driving manufacturing investment and by extension, production.  This is because the single digit interest rate for developments fund far contrasts the more than 25% rate charged on commercial banks’ lending.

The various CBN funding windows are commendable but the poor implementation hinders the attainment of the noble objectives of these funds. Manufacturers hardly access these funds!

Going forward, MAN propose: 

  • Ardent enforcement by the CBN to ensure that the PFIs and DMBs grant transparent and effective access of its intervention funds to manufacturers. This is especially with respect to the N1trillion manufacturing and import substitution facility, the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMED), the 100 billion Health Care and Pharmaceuticals Support Funds and N300 billion Real Sector Support Facility (RSSF);


  • Specific guidelines and timelines for the effective and COMPLETE disbursement of the intervention funds. There should also be periodic report of the status of implementation to the CBN to ensure progressive monitoring. In addition, PFIs and DMBs who fail to diligently and timeously disburse ALL the funds allocated should be sanctioned. 


  • As the umbrella organization of manufacturers in Nigeria, MAN hereby indicates its interest and solicits CBN’s consideration to be part of the monitoring process. 


Segun Ajayi-Kadir, mni

Director General