The Centre for the Promotion of Private Enterprise (CPPE) is advocating for a major restructuring of Nigeria’s development finance framework to resolve a N50 trillion funding shortfall impacting productive industries. Dr. Muda Yusuf, the organization’s CEO, highlighted that a lack of accessible, long-term credit continues to hinder growth across manufacturing, agriculture, and small business sectors.
Yusuf stated that this financial gap is caused by systemic market failures rather than a lack of overall liquidity. Businesses are currently struggling with high interest rates, brief loan terms, and difficult collateral demands that prevent essential investments in technology and expansion. Agriculture, despite making up a significant portion of Nigeria’s GDP, receives less than five percent of total bank lending.
The current high Monetary Policy Rate of 26.5 percent and a 45 percent Cash Reserve Ratio have driven borrowing costs to unsustainable levels. While Yusuf supports the Central Bank of Nigeria’s efforts to stabilize the economy, he emphasized that price stability must be balanced with initiatives that foster job creation and industrial growth. He argued that development finance can be managed transparently without triggering inflationary pressures.
To solve this crisis, the CPPE suggests recapitalizing the Bank of Industry and the Bank of Agriculture, while leveraging pension and insurance funds for development. Other proposed solutions include shifting toward cash flow-based lending, reducing government borrowing, and improving transparency in the management of development finance programs.
