Manufacturers urged to explore alternative funding

August 4, 2025 by Chikodi Okereocha

The Ogun State branch of the Manufacturers Association of Nigeria (MAN) has called on manufacturers across the country to explore alternative sources of funding to sustain their operations, in light of Nigeria’s current economic challenges.

This appeal was made during the 40th Annual General Meeting (AGM) of the Ogun MAN branch held last week in Abeokuta, with the themed “Financing Manufacturing Concerns: Exploring Alternatives.”

The AGM brought together industry stakeholders, financial experts, and government representatives to discuss practical financing solutions for the struggling manufacturing sector.

Chairman of the Ogun MAN branch, Mr. George Onafowokan, in his welcome address, lamented the rising cost of accessing finance from commercial banks, citing the high Monetary Policy Rate (MPR), which stood at 27.5 per cent as of May 2025.

Onafowokan, while stating that this makes loan repayment burdensome and erodes profit margins, however, said: “To ease this burden, we are exploring other avenues where manufacturers can access affordable funds for operations and expansion.”

He noted that institutions like the Bank of Industry (BOI), LECON Finance Company, and Agusto & Co. were present to provide guidance on such alternatives.

Onafowokan highlighted the industry’s struggles with foreign exchange volatility, inflation, and regulatory burdens. He recalled that the naira had devalued from N447 per dollar  in December 2022 to N1,605 per dollar by mid-2024, significantly increasing production costs while consumer purchasing power diminished.

“Despite these challenges, Ogun manufacturers continue to operate and invest in the economy,” he said.

In response to these challenges, the Federal Government launched the N75 billion Manufacturing Sector Fund and another N75 billion MSME Intervention Fund, both of which are disbursed through the BOI at nine per cent interest rate and a 1–5-year repayment period.

Ogun State Commissioner for Industry, Trade, and Investment, Mr. Adebola Sofela, who represented Governor Dapo Abiodun, commended manufacturers for their resilience. He assured them of the State Government’s commitment to improving the business environment through tax harmonization and infrastructure development.

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MAN President Otunba Francis Meshioye also addressed the gathering, urging both state and federal governments to adopt policies that promote local manufacturing.

He emphasised the urgent need to implement the “Nigeria First” policy mandating all government Ministries, Departments and Agencies (MDAs) and contractors to patronize made-in-Nigeria products.

“We must support local industries with policy-backed patronage and consequences for non-compliance,” Meshioye stressed. He also appealed to the Central Bank of Nigeria (CBN) to settle the $2.4 billion in unpaid forex forwards owed to manufacturers.

Meshioye also called for the revival of quarterly interactive meetings between manufacturers and government agencies, the rehabilitation of inner roads in industrial areas like Agbara and Ota, and an end to multiple taxations and regulatory overreach, particularly from agencies like the Financial Reporting Council.

Associate Director at Agusto Consulting, Oritsejimi Ogbobine, during a presentation, urged manufacturers to embrace alternative financing models including equity markets, bonds, green financing, and support from development finance institutions like AfDB, Afreximbank, and BOI.

He, however, emphasised the importance of creditworthiness and advised manufacturers to obtain credit ratings to boost their financial profile and attract funding.

The event marked 40 years of the Ogun MAN branch’s existence, with members and stakeholders reaffirming their commitment to advocating for a stronger, better-supported manufacturing sector in Nigeria.