Nigerian manufacturers slam banks, FG policy bias for imports

Nigeria’s manufacturers are worried that the federal government’s economic policies and banking practices continue to favour importation over investments in local production.

They said Nigeria’s high lending rates, multiple taxation, rising produc­tion costs, and dependence on imported goods have been seen as undermining local manufacturing, raising concerns over the country’s ability to translate its industrial policy into sustainable eco­nomic growth, reports Daily Independent.

This is as banks continue to record huge profits, manufacturers grappling with expensive financing, inadequate electricity, weak infrastructure and limited support for local production, ac­cording to international trade expert, Dr. John Isemede, and the immediate past President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye.

Their concerns highlight the challenges confronting the implementation of the Nigeria Industrial Policy 2025, which is expected to strengthen domestic value chains, improve productiv­ity, promote exports and position Nigeria as a competitive manu­facturing hub in Africa.

Isemede, who was a former Director-General of the Nige­rian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), ar­gued that these limiting factors are making it difficult for manu­facturers and agricultural busi­nesses to access the financing required to expand operations.

“The policy of importation and what the banks are doing in Nigeria is crippling the activities of the manufacturing section of Nigeria. The banks are posting trillions and billions as profits, while the industrial sector dies,” he said.

He illustrated the imbalance by contrasting the difficulty of securing loans for long-term ag­ricultural investments with the relative willingness of banks to finance import businesses.

“If I go to the bank today and say I need a loan for agriculture that will take five or seven years to run a palm plantation, nobody will listen to me. If I say I want to go into cocoa business, nobody will listen to me.

“But if I say I want to bring rice from Thailand or from In­dia, that is what the bank under­stands,” he said.

According to him, the pref­erence for import financing dis­courages investments in local production and reinforces the country’s dependence on foreign goods, while domestic manufac­turers struggle to compete with overseas producers.

The problem is compounded by the high cost of borrowing, Isemede opined, noting that Ni­gerian manufacturers face inter­est rates that put them at a disad­vantage against competitors in countries where businesses can access loans at rates between zero and three percent.

He questioned how local manufacturers could compete effectively under such conditions, particularly when they must also contend with inadequate power supply, poor transportation net­works and other infrastructure deficits.

The challenge of expensive financing was also reflected in MAN’s call for the establish­ment of a Nigeria First Indus­trial Fund to provide long-term concessionary loans, support technology upgrading and pro­mote local value addition.

Meshioye said Nigeria’s in­dustrial transformation required sustained improvements in pro­ductivity, investment, technology adoption, infrastructure, energy, finance and the wider business environment.

He urged the federal gov­ernment to make manufactur­ing a strategic national priority, arguing that the success of the Nigeria Industrial Policy 2025 would depend on effective im­plementation rather than policy declarations.

For Nigeria to emerge as Af­rica’s industrial hub, Meshioye said the country must move be­yond dependence on primary commodity exports and build productive capacity that would enable Nigerian businesses to compete across the continent and in global markets.

Isemede similarly questioned the country’s continued reliance on imports, arguing that succes­sive industrial policies had failed to provide a clear and consistent strategy for moving the economy from importation to local produc­tion and value addition.

He said Nigeria had intro­duced several industrial policies since independence in 1960 but continued to struggle with weak implementation, inadequate coordination and the failure to build on previous policy initia­tives.

He also faulted the lack of alignment between industrial, trade, fiscal, monetary and for­eign policies, saying the discon­nect undermined the country’s efforts to develop a competitive manufacturing sector.

His position aligns with MAN’s demand for consistency and predictability in fiscal, mone­tary, trade and industrial policies to give investors the confidence required to make long-term com­mitments.

Meshioye identified high electricity costs, expensive pro­duction inputs and logistics, in­adequate infrastructure, limited access to long-term industrial finance, policy uncertainty and dependence on imported inputs as major constraints confronting manufacturers.

He called for a review of in­dustrial electricity pricing, reli­able and affordable power supply, dedicated industrial feeders, em­bedded generation and improved grid infrastructure.

MAN also urged the govern­ment to accelerate investments in roads, railways, ports and industrial logistics corridors to reduce production and distribu­tion costs.

Isemede, meanwhile, argued that Nigeria’s industrial policy could not succeed without stron­ger connections between farm­ers, technical institutions, manu­facturers, processors, packaging businesses and markets.

He said industrialisation re­quired effective linkages across the different stages of produc­tion, from raw materials to pro­cessing, distribution and sales, adding that the absence of such connections weakened domestic value chains.

The trade expert maintained that Nigeria’s growing depen­dence on imported products reflected the failure to sustain domestic productive capacity and develop industries capable of meeting local demand and supplying export markets.

Beyond financing and infra­structure, Isemede and Meshioye identified the business environ­ment as a major factor deter­mining the future of Nigerian manufacturing.

Isemede criticised the burden of multiple taxation, arguing that businesses were confronted with levies from different levels of government and other groups, increasing their operating costs and discouraging investment.

“The only language we under­stand is taxation. We have used taxation to kill production in this country,” he said.

MAN also identified the cu­mulative cost of taxes and regu­latory compliance as part of the structural constraints affecting manufacturers.

Meshioye called for the imple­mentation of the 2025 Tax Acts in a manner that promotes industri­al competitiveness and reduces the cost of doing business.

He further urged the gov­ernment to stop the retroactive application of tax provisions, which he described as illegal and a breach of trust.

The association also called for stronger trade-defence mechanisms against dumping, substandard imports and other unfair trade practices, alongside support for Nigerian manufactur­ers to compete under the African Continental Free Trade Area.

Isemede argued that Nigeria needed a comprehensive export programme in addition to its export policy to promote locally manufactured goods, identify priority products and establish clear targets for foreign exchange earnings.

“We have an export policy. We don’t have an export programme. The government is not ready to look at exports,” he said.

He also raised concerns about the country’s reliance on import duties as a major source of government revenue, arguing that greater emphasis should be placed on developing local indus­tries and expanding exports.

MAN similarly called for targeted incentives, export fi­nancing, trade facilitation and strategic support for Nigerian manufacturers to participate in regional and global value chains.

The association further urged the government to strengthen foreign exchange support for productive manufacturers, en­courage backward integration and increase the use of locally available raw materials.

For Isemede, however, the fun­damental issue remains whether Nigeria has a coherent industri­al strategy capable of reversing its dependence on imports and restoring the competitiveness of domestic producers.

He argued that without afford­able financing, a supportive tax regime, reliable infrastructure and coordinated policies, manu­facturers would continue to face difficulties expanding produc­tion and competing with foreign businesses.

Meshioye said the Nigeria Industrial Policy 2025 provided a framework for addressing long­standing structural constraints, but stressed that its success de­pended on consistent implemen­tation, institutional coordination and measurable outcomes.

MAN consequently urged the federal government to fast-track the policy’s implementation through clear timelines, mea­surable performance indicators and institutional accountability, while adequately resourcing the Industrial Revolution Working Group to coordinate reforms and monitor progress.

The stakeholders’ positions suggest reducing import depen­dence and reviving local produc­tion will require more than the announcement of an industrial policy. It will require a coordinat­ed approach to financing, taxa­tion, infrastructure, trade and export development that enables Nigerian manufacturers to pro­duce competitively for domestic and international markets.