The Minister of State for Industry, Trade and Investment, Senator John Owan Enoh, has said right financing must be long enough to support investment in machinery and production capacity, while being affordable enough for manufacturers to price their products competitively.
He stated this at the Ministerial Roundtable 2 of the Industrial Revolution Work Group (IRWG) of the Federal Ministry of Industry, Trade and Investment (FMITI), themed ‘Affordable Long-Term Finance and Building: The Capital Architecture for Industrial Growth and MSME Inclusion,’ saying manufacturers need what he described as the ‘right kind of money’ to expand production and compete.
‘Our manufacturers do not lack ambition, they don’t lack orders, they don’t lack markets. What they continuously lack is money, the right kind of money,’ he said.
He argued that the country cannot achieve industrial growth without restructuring how capital gets into factories.
He said the challenge facing manufacturers was not simply the availability of money, but the cost, tenor and structure of financing, noting that industrial investments often require years to mature and therefore cannot be sustained with short-term funds.
He stressed that the long gestation period of industrial investments made the current structure of financing unsuitable for manufacturing.
‘The issue is not that there is no money. It is the price of the money, the term of the money and the capital architecture into the factories,’ he said.
The minister said a business investing in a long venture that could take 10 to 15 years to mature could not reasonably be expected to repay financing within three or six months.
He said the mismatch in financing was contributing to a situation where businesses could find trading more attractive than investing in production, particularly when the cost and structure of capital made manufacturing less viable.
Enoh said the finance sector needed to help move Nigerians from trading to production, stressing that the objective of the ongoing discussions was to find ways of directing capital towards productive investments.
He added that Nigeria’s manufacturing sector, which contributed more than 20 per cent to gross domestic product in the early 1990s, had struggled to move beyond the eight to nine per cent range for more than a decade, despite the resilience of manufacturers.
The minister said the country’s industrial policy had set an ambition of raising manufacturing’s contribution to about 20 per cent by 2030 or 2031, but achieving the target would require financing arrangements capable of supporting long-term industrial investment.
The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, represented by his Special Adviser on Finance and Investment, said commercial banks’ credit to the manufacturing sector contracted by about N1.9 trillion in 2025, representing a decline of more than 22 per cent from N8.5 trillion to N6.61 trillion.
He said manufacturers were borrowing at prime rates averaging about 27 per cent, with maximum rates reaching the mid-30 per cent range, describing the environment as unsuitable for investments requiring seven, 10 or 15 years to deliver returns.
Oyedele said the focus should extend beyond commercial bank lending to the deliberate use of public balance sheets, blended finance, institutional capital, pension funds, insurance assets and the capital market to support productive investment.