Key points
- The CPPE says Nigeria’s productive sectors face a financing gap exceeding N50 trillion.
- It attributes the shortfall to high lending costs, limited long-term credit and structural weaknesses in the financial system.
- The organisation is calling for reforms to expand affordable financing for businesses and productive sectors.
Main story
The Centre for the Promotion of Private Enterprise (CPPE) has called for comprehensive reforms to Nigeria’s development finance architecture, saying the country’s productive sectors face a financing gap of more than N50 trillion.
In a policy brief, CPPE Chief Executive Officer, Muda Yusuf, said the funding deficit continues to constrain growth in manufacturing, agriculture, agribusiness, micro, small and medium enterprises (MSMEs) and export-oriented businesses.
According to Yusuf, businesses face structural financing constraints driven by high lending rates, short loan tenors and stringent collateral requirements, while limited access to long-term capital continues to hinder expansion and productivity.
He said the financing challenge reflects deeper market failures rather than a shortage of liquidity in the banking system.
Yusuf noted that agriculture contributes more than one-fifth of Nigeria’s Gross Domestic Product (GDP) but has historically received less than five per cent of total bank credit. He added that manufacturers require affordable long-term financing for investments in machinery, factory expansion, technology upgrades, energy infrastructure, automation and export development.
The CPPE chief argued that prevailing monetary conditions, including the Monetary Policy Rate (MPR) of 26.5 per cent and Cash Reserve Requirement (CRR) of 45 per cent, have pushed commercial lending rates beyond levels many productive businesses can sustain.
While acknowledging the Central Bank of Nigeria’s efforts to restore monetary stability, stabilise the exchange rate and curb inflation, Yusuf said monetary policy should also support investment, employment and economic growth.
He recommended recapitalising the Bank of Industry and the Bank of Agriculture, expanding credit guarantee schemes, introducing longer-tenor refinancing windows, promoting supply-chain financing and cash-flow-based lending, improving credit information systems and mobilising pension and insurance funds for productive investments.
Yusuf also urged the government to reduce domestic borrowing to free up more credit for private sector investment.
The issues
Nigeria’s high interest rate environment has intensified concerns over access to affordable credit, particularly for productive sectors that require long-term financing. Economists continue to debate how to balance monetary tightening aimed at controlling inflation with policies that support investment, industrialisation and economic growth.
What’s being said
“Price stability and development finance should not be treated as mutually exclusive objectives.” — Muda Yusuf, Chief Executive Officer, CPPE.
“Commercial banks alone could not finance Nigeria’s industrialisation because they largely depended on short-term deposits.” — Muda Yusuf, Chief Executive Officer, CPPE.
“Nigeria requires a modern development finance framework that is rules-based, transparent and insulated from political interference.” — Muda Yusuf, Chief Executive Officer, CPPE.
What’s next
The CPPE is urging policymakers to pursue reforms that expand access to long-term financing while maintaining macroeconomic stability, with greater attention expected on development finance as the government seeks to accelerate industrialisation and private sector growth.
Bottom line
The CPPE argues that closing Nigeria’s estimated N50 trillion financing gap will require structural reforms that improve access to affordable long-term capital, enabling productive sectors to drive investment, job creation and sustainable economic growth.
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