Nigerian manufacturers unable to access CBN's $2.6bn Covid-19 import substitution fund

MANUFACTURERS have lamented the fact that they are unable to access the Central Bank of Nigeria's (CBN) N1trn ($2.6bn) Covid-19 Stimulus for Manufacturing and Import Substitution Fund floated to enable them get over the economic impact of the pandemic.

Like most African countries, Nigeria has been hit hard by the coronavirus pandemic as with global industrial output falling, there has been a dearth in the purchase of primary products, hitting their economies hard. With African nations heavily dependent in imports for survival, this collapse in exports has led to a chronic shortage of foreign exchange, which in turn has made purchases hard.

To ameliorate the situation, the CBN introduced this stimulus package last year, making funds available to local manufacturers to fill the void created by the collapse in imports. However, according to the Manufacturers Association of Nigeria (Man), gaining access to these funds is difficult.

Man director-general Segun Ajayi-Kadir, said his members had not been able to access the fund due to prevarication of the participating financial institutions and deposit money banks (DMB). In a position paper titled Comment of MAN on CBN intervention fund for manufacturers and the naira for dollar scheme, he faulted the poor implementation of the programme, which hindered the attainment of the noble objectives of these funds.

Mr Ajayi-Kadir said: “Generally, Man observed through feedbacks from members and interaction with the CBN on several occasions that these facilities and funds have not been adequately accessible to manufacturers due mainly to the prevarication of the private financial institutions (PFIs) and DMBs. Man, while acknowledging the excellent initiative of the CBN in setting up the N1tn Covid-19 stimulus facility for manufacturing and import substitution, observed that most of its members who applied were not able to get it.

“According to the CBN, only 76 companies have received N300bn, which translates to 30%, in one year. Intriguingly, according to our members, the banks are claiming that they have not received the framework for the administration of the facility from the CBN.”

Commending the CBN funding window, Mr Ajayi-Kadir added that going forward, there should be strict enforcement of the grants to manufacturers. He added that thus is especially with respect to the N1tn manufacturing and import substitution facility, the N220bn Micro, Small and Medium Enterprises Development Fund, the 100bn Health Care and Pharmaceuticals Support Fund and the N300bn Real Sector Support Facility.

According to Mr Ajayi-Kadir, there should be specific timelines as to when the funds would be completely disbursed, stressing that any PFIs and DMBs who failed to diligently disburse the funds should be sanctioned. Regarding the CBN naira for dollar scheme, he stressed the need to dimension the inflows which has historically been 70% for family support and 30% for other purposes, including real estate which carries a great part.