Manufacturers in the country have complained of their inability to access N1tn intervention funds provided by the government to cushion the effects of the coronavirus pandemic on their business.
The manufacturers, who are members of Manufacturers Association of Nigeria (MAN), said there are bureaucracy surrounding the loan that was being offered by the government through the Central Bank of Nigeria.
The acting Director General, MAN, Ambrose Oruche, who spoke to Biz Watch Nigeria, on behalf the affected manufacturers, said the commercial banks through which the manufacturers applied for the loan, were asking the applicants to take a credit facility from them as a prerequisite for processing the intervention fund request.
According to him, this has created a bottleneck for the beneficiaries on the N1tn intervention fund.
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Oruche said, “The process of accessing it is not too easy because many of our members have shown interest though their commercial bank and the commercial banks were given the responsibility of appraising the credit and giving the credit but they are not given any rewards for their efforts.
“Based on that, some of them are insisting that before they can access the fund, manufacturers have to take a loan from them. If they are accessing the fund for machinery, they should take working capital from them so that they can get some benefits from it.”
However, the acting DG said the association had written to the CBN to intervene in the matters and expressed hope that the matter would be resolved soon.
Also speaking with our reporter, the Director-General, Nigeria Employer’s Consultative Association, (NECA), Dr Timothy Olawale, said the fund had been lying idle as the beneficiaries had not been able to obtain the fund.
“To the best of my knowledge, they have not been able to secure the loan. There are many intervention funds through the CBN that are available for manufacturers. However, the issue of bureaucracy constitutes roadblock,” he said.
According to him, the manufacturers were finding it difficult to meet the terms and conditions for accessing the fund.
He added that due to some outstanding debts to commercial banks, manufacturers prefer intervention in form of grants or bailout to boost their businesses.
Due to the impact of the coronavirus on global supply chains and the real sector, the CBN in May last year offered N1tn intervention fund to manufacturers to boost local manufacturing and import substitution.
The apex bank also granted an additional one-year moratorium on existing loan facilities and reduced interest rate from nine per cent to five per cent.
The CBN Governor, Godwin Emefiele, had said the management of the CBN would meet with the Bankers Committee to work out the modalities for the intervention fund.
Beginning from May 2020, the manufacturing sector experienced six straight months of contraction due to low productivity and sales caused by the lockdown introduced to contained the spread of COVID-19.
But the sector has recovered in November last year, according to the CBN’s Purchasing Managers’ Index Survey Report.
The manufacturing PMI stood at 50.2 index points in November.
Out of the 14 subsectors surveyed, eight subsectors reported expansion (above 50 per cent threshold) in November.
According to the report, the subsectors that expanded are transportation equipment; non-metallic mineral products; furniture and related products; cement; textile, apparel, leather and footwear; plastics and rubber products.
Others were food, beverage and tobacco products, as well as printing and related support activities.
But six subsectors – electrical equipment; petroleum and coal products, chemical and pharmaceutical products; primary metal; paper products, and fabricated metal products – contracted in November.
