MAN to FG: Recapitalise BOI to meet industries’ credit demand

The Manufacturers Association of Nigeria (MAN) has asked the federal government to recapitalise the Bank of Industry (BOI) to meet the growing credit demand of industries.

MAN said this in its position paper on Nigeria’s third quarter gross domestic product (GDP), where the group stressed the need to enhance credit information systems and broaden the scope of assets for collateral.
“It is critical to create special windows for providing single-digit interest rates to productive sectors and relax stringent conditions for SMEs to access funding,” MAN said.

“The government must also recapitalise the Bank of Industry (BOI) to meet the growing credit demand of industries.”
The Central Bank of Nigeria (CBN)’s constant monetary policy rate (MPR) hikes have driven up the cost of credit in the nation. Manufacturers said they obtained loans from deposit money banks at an average interest rate of 28.1 percent in the second half of 2023.
They consequently incurred estimated losses totalling N341 billion over the period.

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According to MAN, the government must also retain the current excise duty of N10 per liter on non-alcoholic beverages to avoid shutting down the industry.

“It is important for the government to direct the Central Bank of Nigeria to clear $2.4 billion outstanding dollar obligations on FX forward contracts to support manufacturers.
“There is also a need to review import duty rates for production inputs, particularly those not locally available, and consider pegging the rate at N800.”

The group urged the federal government to implement measures to streamline customs’ procedures, including increased use of technology and decentralisation of seaports.

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It called for the prioritisation of budgetary allocation for infrastructure development, especially along strategic economic hubs, while encouraging public-private partnerships for infrastructure development, including roads, railways, and port access roads.

“The government must direct the Nigerian Electricity Regulatory Commission (NERC) to review the excessive increase in electricity tariffs for Band A customers. The government must prioritise domestic gas supply to manufacturers and enforce Naira-denominated pricing.
“There is also a need to ensure transparency in electricity tariff charges, invest in infrastructure and efficiency improvements by Distribution Companies, and introduce outage compensation mechanisms,” the association added.