Inadequate financing of the Nigerian industrial sector has affected the value-adding industries known for creating a large number of jobs to boost the economy. This was contained in an industrial blueprint sent to President Muhammadu Buhari, by President, Manufacturers Association of Nigeria Frank Udemba Jacobs, weekend.
According to him, “Manufacturing financing is extremely important for the enduring manufacturing sector.” Many deposit money banks see financing such industries as high risk; available development banks like the Bank of Industry, BoI and the Bank of Agriculture have limited financing muscle to sufficiently meet their needs.”
He said that most agro processing industries such as flour milling, cassava-to-starch, sugarcane-to sugar, dairy, fruit juice and confectionery have the potential capacity to create millions of jobs for the teeming unemployed Nigerians, as they often need workers at various stages of production, starting from the farm down to the factory.
However, a number of players in these sectors, especially those in the small- and medium-scale category, have serious financing needs not easily met by the country’s monetary system. “In this regard, the recently established Development Bank of Nigeria dedicated to industrial development should be fast-tracked,” Jacobs said. “Government also needs to recapitalise the Bank of Industry and should use it more effectively to ensure that the needed financing of industry is attained,” he further said.
Medium and large enterprises have often resorted to borrowing to finance their productive activities. Available evidence shows that firms such as Emzor Pharmaceuticals, Nestle Nigeria,Peugeot Automotive Nigeria, Innoson Technical and Industrial Company, Eastern Metals Limited, UNTL plc, Honeywell Flour Mills, KAM Industries, Lafarge Cement Wapco plc and Dangote Cement, have all been beneficiaries of the Bank of Industry.
Others such as Rumbu Sacks Nigeria Limited, BAGCO, Tara Agro Industries, ANAMCO, Bendel Feed and Flour Mill, Onward Paper Mills Limited, Ladol Integrated, among others, have also been supported by the bank. But stakeholders stress that with the level of work done by the BoI, more funds should be given to the development bank.
“I believe that the bank should be given more funds,” said Ikechukwu Ibeabuchi, chief executive, MD Services Limited, a parent company of a chemical-making firm. “This will help many intermediate firms which lack funding, mostly long-term funding, stay afloat. I think we need more long-term funds with single-digit interest rates,” Ibeabuchi said.
Apart from agro processors, miners are also hampered by finance, which makes it almost impossible for them to adequately serve firms in the non-metallic products sector like ceramics and glass. Owing to the backward integration programme, cement firms currently mine their own limestone and gypsum as they have the financial muscles to do so. But independent miners do not have such finances to steer businesses, a situation that makes entry of more unemployed young people impossible.

READ ALSO  18 states to benefit from $500m World Bank projects