The Centre for the Promotion of Private Enterprise (CPPE) has urged the federal government and the Central Bank of Nigeria (CBN) to overhaul the country’s development finance framework, warning that Nigeria’s productive sectors face a financing shortfall of more than N50 trillion.
In a policy brief released on Sunday and signed by CPPE’s CEO, Muda Yusuf, the advocacy group argued that the country’s current financial system cannot provide the affordable, long-term funding needed by manufacturers, farmers, agribusinesses, exporters, and micro, small, and medium-sized enterprises (MSMEs).
CBN had earlier curtailed its development finance interventions to concentrate on its primary mandate of ensuring price and monetary stability.
The organisation, CPPE, said the financing constraints stem from structural market failures rather than a shortage of liquidity, citing high lending rates, short loan tenors, stringent collateral requirements, limited risk appetite among lenders and inadequate patient capital.
“CPPE estimates a conservative current real-sector financing gap of over N50 trillion when account is taken of unmet financing needs across manufacturing, agriculture, agribusiness, MSMEs, supply chains and export-oriented enterprises,” CPPE stated.
