The Federal Government will in November introduce a financing value chain initiative to address the problem of access to finance by manufacturing industries.
The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga said this in Lagos on Thursday at the Annual General Meeting of the Manufacturing Association of Nigeria, adding that the initiative, which was part of the Nigeria Industrial Revolution Plan, would provide long-term loans and ensured that manufacturing industries in the country remained competitive.
Aganga said that the Federal Government had already put structures in place to reduce the cost of borrowing for manufacturers.
He said, “For the first time in decades, the Nigerian government has decided to tackle the biggest challenges that you manufacturers have faced for years. This is to ensure that manufacturing in Nigeria becomes truly competitive.
“In the area of financing, Nigerian manufacturers have always struggled with the high cost of funding, yet nothing was done about it. But I am glad to inform you today that as part of the NIRP, we have put together our nation’s first comprehensive real sector funding intervention under a programme called the ‘Financing Value Chain Initiative.”
In his address, President Goodluck Jonathan said the manufacturing sector had become Nigeria’s biggest driver of economic growth, attributing the current improvement in the capacity utilisation of the real sector to the implementation of the Industrial Revolution Programme.
He reiterated that the cost of borrowing for manufacturers, extended loan repayment periods, and access to new sources of capital for the industrial sector would be the benefits of the new financing initiative.
“This initiative will address the structural and specific issues that have made it difficult to raise affordable funds in Nigeria. We are convinced that when fully implemented, the Financing Value Chain Initiative will provide affordable, long term funding, on reasonable terms, to both large and small businesses in Nigeria,” he said.
Jonathan, who was represented by Vice President Namadi Sambo, said his administration had recorded progress in key sectors of the Nigerian economy through the implementation of the NIRP.
Earlier, the outgoing President of MAN, Chief Kola Jamodu, had said that the Bank of Industry, which had the mandate of providing manufacturing industries with finance, was limited by under-capitalisation.
He urged the government to recapitalise the bank and use it more effectively to ensure that the needs of the manufacturers were met.