Amid the country’s fledging economy and the manufacturing sector’s resilience following the foreign exchange stability and others, the Manufacturers Association of Nigeria (MAN) has urged the Federal Government that the time was ripe to release the N1 trillion meant for the country’s manufacturing sector under its stabilisation plan scheme.
Similarly, MAN has stated that the high Monetary Policy Rate (MPR) otherwise known as lending rate in the country, could push the association to approach the Nigerian Capital Market to raise cheaper loans for local manufacturers operating in the country’s manufacturing sector.
Indeed, MAN threatened to jettison commercial banks’ loans in the country’s financial institutions if government cannot reduce lending rate to 5 per cent in the country.
The Director-General of MAN, Mr. Segun Ajayi-Kadir, stated this in an interview with Sunday Telegraph in Lagos.
He said that the current government should facilitate the approval of the N1 trillion earmarked for manufacturers under the Stabilisation Plan to support industries struggling under current financial pressures.
Ajayi-Kadir explained that already, the economic Stabilisation plan contains a number of laudable fiscal policy measures that could reduce production costs in the economy.
He, however, confirmed that local manufacturers have collected the N75 billion manufacturing sector bailout grant from the Federal Government, given to the Bank of Industry (BOI) to distribute to them.
The MAN DG said: “On the N75 billion manufacturing sector bailout fund, I think what you are referring to is the N75 billion that directly came to us.
I must give credit to government and the BOI. Because BOI was smart and we were also smart people. So, we had an agreement with them. We actually signed an MoU.
And I must tell you that we fully utilised the opportunities created by the MOU. And I can confirm to you that the N75 billion has been fully disbursed. Our members were involved in the process.
Even when we had situations that we couldn’t ascertain the status of the beneficiaries, we investigated it together with the BOI to ensure that they are authentic manufacturers.
“But what we have seen is that this is now an advantage for us; it speaks for us and it means that when government decides to do the right thing as they have done, the impact could be positive and immediate.
And this has created an avenue to call for the release of the N1 trillion under the Stabilisation plan that was promised to the private sector.
“So, I will want you to also join us to say that we have demonstrated our capacity to work together with BOI and it should go to no any other bank than BOI.
And if government should release this, it will immediately have an impact because even though they say interest rate is coming down, it has not yet reached us.
And I think our average lending rate is still above 30 per cent. And I mean for a manufacturer. We have indicated that anything below 5 per cent is what we want because those with whom we compete have relayed those things out.
They operate in a relatively lower costs environment and we compete in the domestic and the international markets as well.” While speaking on Bank credit to the manufacturing sector amid high interest rate currently in the financial sector, Ajayi-Kadiri explained that; ‘I mean, it is very evident that we are just working for the banks in the country and it is safer for us not to borrow from the commercial bank and our members are looking for other instruments.
Many people have said that we should go to the Capital Market and I think we may need to take a very serious look at that, probably have a conversation ahead of time and then be able to see how we can take advantage of that.
There is also the issue of when you get the loans from the specialised bank, the issue of having guarantees in the bank. I think both of them should work together to see how to improve offtake from the commercial bank. It is always a major issues,” he added.
