By Adedapo Adesanya
The Bank of Industry (BoI) has urged manufacturers to embrace the various available financing options aimed at driving the sector’s competitiveness under the African Continental Free Trade Area (AfCFTA).
This was the centre focus at the 52nd Annual General Meeting (AGM) of the Manufacturers Association of Nigeria (MAN) Apapa Branch, Lagos, on Tuesday, themed Financing Nigeria’s Manufacturing Sector for Economic Growth.
Mr Olukayode Pitan, the Managing Director of BoI, said that seamless access to finance was imperative to sustain the manufacturing sector, considering its contribution to the economic diversification drive of the nation.
Mr Pitan, represented by Mr Isa Omagu, General Manager for Large Enterprises at BoI, said the bank was poised to support manufacturers and committed to providing financing solutions to sustainable businesses.
He urged manufacturers to improve their ability to have access to finance for competitive advantage by keeping their businesses in order, adopting digital solutions to improve processes, and avoiding fraudulent business ideas.
He listed some of the lingering problems affecting productivity in the manufacturing sector, including the inability to access finance, infrastructural deficiencies, high energy costs, and high lending rates, among others.
Mr Pitan noted that accessing finance remained a major challenge facing manufacturers due to poor stock-keeping practices and lack of credit history, structure, and collateral.
He said the best financing options for Nigeria manufacturers to compete effectively under AfCFTA remained through Development Financial Institutions (DFIs) interventions such as BoI and African Export-Import Bank (Afreximbank).
He added that the bank had developed products to provide equipment financing and working capital for Micro, Small, and Medium Enterprises (MSME) in target sectors at less than 10 per cent interest rate per annum.
“Financing is a key consideration for Nigerian manufacturers to ensure business survival and profitability as the sector can play a key role in enabling the country’s industrialisation and economic development drive.
“Our business model reflects our goal to drive development through financial and advisory support to all customer levels with dedicated teams for micro, small, and medium enterprises, youth, and women-led businesses.
“Key issues considered are relatively low-interest rate, MSME focus, innovative financial solutions, job and value creation, sustainability and societal impact,” he said.
On the part of the Lagos State government, Mrs Ososanya, Permanent Secretary, Lagos State Ministry of Commerce, Industry and Cooperatives, who represented the Governor of Lagos, Mr Babajide Sanwo-Olu, said it was imperative for manufacturers to explore various avenues of financing to bolster competitiveness, sustainability and harness the full potentials of the AfCFTA.
She said that grants such as export programme grants, market exploitation grants, and business attraction grants among others were available for manufacturers to explore.
She said to attain and maintain competitiveness under AfCFTA, the state would continue to foster an environment that facilitates seamless access to financing options tailored to the unique needs of Nigerian manufacturers.
“Manufacturers can also take advantage of traditional sources such as venture capital, private equity, and export financing to support and facilitate international trade and exports.
“There is a need to collaborate with the finance sector, manufacturers, private sector, and government establishments,” she said.
On his part, Otunba Francis Meshioye, President, MAN, said the recent economic developments brought about government policies such as floating of the naira, removal of fuel subsidy, and increase in interest rate, made the theme of the meeting apt and timely.
He said the association would continue to give priority to issues affecting the sector while striving to ensure that government provides the needed environment for our investments to thrive.