CPPE seeks development finance overhaul to bridge N50trn real sector funding gap

Nigeria's productive sectors are being held back by a significant financing gap, estimated at over 50 trillion naira (approximately $33 billion), according to the Centre for the Promotion of Private Enterprise (CPPE). The organization is calling for a comprehensive overhaul of the country's development finance architecture to address this critical issue.

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inadequate access to affordable, long-term finance remains one of the biggest obstacles to growth in manufacturing, agriculture, agribusiness, micro, small and medium-sized enterprises (MSMEs), and export-oriented businesses.

CPPE Chief Executive Officer Muda Yusuf stated that a lack of affordable, long-term financing is a primary impediment to growth in key areas like manufacturing, agriculture, agribusiness, and micro, small, and medium-sized enterprises (MSMEs). He emphasized that this gap reflects deep-seated market failures rather than a simple lack of liquidity. Businesses continue to struggle with high interest rates, short loan durations, and demanding collateral requirements, hindering their ability to expand, boost productivity, and adopt new technologies.

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the financing gap reflects deep structural market failures rather than a shortage of liquidity in the financial system.

Yusuf pointed out that agriculture, despite its substantial contribution to Nigeria's GDP, receives a disproportionately small percentage of bank credit. Manufacturers, in particular, need access to long-term funding for essential investments such as machinery, factory upgrades, and export development, which cannot be reliably secured through expensive short-term commercial loans. Current monetary policy conditions, including a high Monetary Policy Rate and Cash Reserve Ratio, exacerbate borrowing costs, pushing them beyond the reach of many businesses.

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agriculture, despite contributing over one-fifth of Nigeria’s Gross Domestic Product (GDP), has historically attracted less than five per cent of bank credit.

While acknowledging the Central Bank of Nigeria's efforts to stabilize the economy, Yusuf argued that price stability should be balanced with policies promoting investment and job creation. He believes that targeted development finance interventions can complement monetary policy without fueling inflation. Yusuf stressed that commercial banks, reliant on short-term deposits, cannot single-handedly finance the nation's industrialization. He called for specific reforms, including recapitalizing development banks, expanding credit guarantee schemes, establishing longer-term refinancing options, and better utilizing pension and insurance funds for productive investments.

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manufacturers require affordable, long-term funding for machinery acquisition, factory expansion, technology upgrades, energy infrastructure, automation and export development, investments that cannot be sustainably financed through expensive short-term commercial bank loans.