In light of Nigeria’s challenging economic climate, George Onafowokan, Chairman of the Manufacturers Association of Nigeria (MAN), Ogun State Branch, has called on manufacturers nationwide to embrace alternative financing mechanisms. Speaking at the 40th Annual General Meeting of Ogun MAN in Abeokuta, Onafowokan urged the industry to look beyond traditional bank loans to ensure survival and foster growth amid soaring interest rates and inflationary pressures.
The event, themed ‘Financing Manufacturing Concerns: Exploring Alternatives,’ underscored the urgent need to diversify financial options. According to Onafowokan, “With the last official MPR at 27.5 per cent as of May, excluding bank charges and processing fees, repaying commercial bank loans has become burdensome. The rate ultimately erodes the profit on goods produced with the loan amount.”
okay.ng reports that, recognizing the unsustainable nature of conventional loans, Onafowokan highlighted leasing, equity financing, green bonds, and support from development finance institutions like the Bank of Industry (BOI), African Development Bank (AfDB), and African Export-Import Bank (Afreximbank) as viable alternatives. He stressed that leasing equipment — with an option for eventual ownership — could ease the burden of costly asset procurement required for factory expansion.
The Ogun state MAN chairman lamented the recent hurdles manufacturers face, including escalating energy expenses, fluctuating foreign exchange rates, and diminishing consumer buying power. He cited a dramatic rise in the foreign exchange rate from N447/$1 in December 2022 to N1,605/$1 by 2024, which has compounded production costs and led to unsold inventory piling up.
Despite these adversities, Onafowokan commended Ogun’s manufacturers for their resilience and commitment to growth. The AGM featured presentations from BOI, LECON Finance Company, and Agusto & Co., which focused on practical alternative financing options for the sector.
Recent government interventions were also discussed, notably the N75 billion Manufacturing Sector Fund and the N75 billion MSME Intervention Fund disbursed through BOI at accessible interest rates. He encouraged manufacturers to capitalize on these funds to expand capacity.
Ogun State Commissioner for Industry, Trade, and Investment, Adebola Sofela, reiterated government support for manufacturers and highlighted efforts to ease business operations through tax harmonization and infrastructure improvements.
Meanwhile, Francis Meshioye, National President of MAN, stressed the importance of policy-driven patronage for local manufacturers and called for prompt settlement of $2.4 billion in unpaid foreign exchange forwards owed to the sector. He also advocated for renewed government-manufacturer dialogues and infrastructural rehabilitation in key industrial areas.
Associate Director at Agusto Consulting, Oritsejimi Ogbobine, advised manufacturers to seek capital from debt and equity markets, emphasizing the need for improved credit profiles and transparency to attract investors.
The gathering marked four decades of Ogun MAN’s dedication to fortifying Nigeria’s manufacturing ecosystem, with reaffirmed commitments from stakeholders toward sectoral growth and sustainability.
