Stakeholders differ on CBN’s withdrawal from manufacturers’ intervention fund

By Yinka Kolawole

Industry stakeholders have expressed divergent views on the Central Bank of Nigeria’s (CBN) withdrawal from direct intervention financing of the manufacturing sector.

Director General of Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona, said CBN’s exit has left manufacturers heavily dependent on commercial banks that are not structured to provide long-term industrial financing.

According to her, withdrawing intervention financing without a credible replacement has pushed manufacturers into a credit market that is ill-suited to industrial development, while routing development finance through commercial banks has weakened the concessional benefits of such schemes, discouraged lending to small and medium-scale manufacturers and contributed to declining industrial credit.

Although optimistic that the Lagos State Industrial Policy and the National Industrial Policy could spur fresh investments, Almona stressed that implementation, not policy announcements, would restore investor confidence.

She urged the Federal Government to immediately release the proposed N1 trillion Manufacturing Stabilisation Fund, recapitalise the Bank of Industry (BoI) with SME-focused credit guarantees, review the Cash Reserve Ratio (CRR) to improve banking sector liquidity and strengthen coordination between monetary and fiscal authorities.

“Nigeria cannot industrialise on promises,” she said, warning that effective policy execution would determine whether the country experiences industrial recovery or prolonged stagnation.

Similarly, Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, described access to affordable finance as one of the greatest challenges confronting manufacturers.

He argued that heavy government borrowing at interest rates approaching 20 per cent has crowded out the private sector, making it increasingly difficult for manufacturers to access affordable credit.

Yusuf noted that while short-term facilities may meet working capital needs, investments in machinery, factories and production facilities require long-term financing at competitive rates.

He urged the government to recapitalise BoI to provide manufacturers with long-term, single-digit interest loans.

However, a former Director-General of Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. John Isemede, supported CBN’s withdrawal from direct intervention programmes, insisting the apex bank should focus on its core mandate of monetary policy.

He argued that past intervention schemes exposed the limitations of central bank-led development financing and maintained that institutions such as BoI, supported by commercial banks, are better suited to provide industrial credit.

Isemede called for stronger alignment between monetary and fiscal policies, improved incentives for exporters and a comprehensive industrial roadmap, stressing that sustainable manufacturing growth requires coordinated reforms across the entire value chain rather than isolated financing interventions.

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