The Bank of Industry (BoI) has emphasized the need for Nigeria to significantly enhance its production capacity in order to achieve a one trillion-dollar economy by 2026.
The Divisional Head of Services at the BoI, Dr. Isa Omagu, stated this during the annual workshop of the Finance Correspondents Association of Nigeria (FICAN) held in Lagos.
The workshop, themed “Nigeria’s Journey Towards a $1trn Economy: Impact of Banks’ Re-Capitalization, Opportunities for Fintechs, and the Real Sector,” brought together key stakeholders in the financial industry.
As a panelist at the event, Dr. Omagu highlighted that “the economy relies on both monetary and fiscal policies, which must work in tandem. While the monetary authorities focus on stabilizing prices, it is equally essential for the fiscal side, particularly governance, to play an active role.”
He pointed out that insufficient domestic production has been a significant challenge, stating,
“We are not producing enough. We cannot continue to rely on imported goods and expect a sustainable and robust economy,” he said.
Omagu called for increased investment in the productive sectors of the economy.
“By investing strategically in agriculture, infrastructure, and services, we can drive local production, reduce importation, and ease pressure on foreign exchange reserves,” he said.
Regarding government interventions over the past six months, Dr. Omagu noted that the BoI has been playing a pivotal role in enhancing production by supporting Small and Medium Enterprises (SMEs).
“Through our initiatives, we are reducing reliance on imports and promoting backward integration by encouraging local sourcing of raw materials.
“The goal is for the only imports to be limited to equipment, while all raw materials for production should be locally sourced,” he said.
He further stressed that Nigeria cannot achieve a one trillion-dollar economy without significantly boosting its production capacity.
Omagu also highlighted various funds aimed at supporting SMEs and large enterprises.
“We have established a N200 billion integration fund, as well as a N50bn grant specifically for SMEs in rural areas. To date, we have disbursed 98 percent of these funds, with each beneficiary receiving N50,000,” he said.
Additionally, he noted, “There is a N5 billion loan facility available to SMEs, repayable over an extended period at a single-digit interest rate. This initiative is designed to help SMEs overcome the significant challenge of accessing funding.”
Omagu also spoke about a fund targeting one million SMEs and large enterprises involved in manufacturing. These funds, provided at a single-digit interest rate for up to seven years, are intended to support the acquisition of equipment necessary for business growth.
He expressed optimism that these initiatives would lead to increased employment, reduced dependency on imports, and greater production for export, thereby boosting Nigeria’s non-oil foreign exchange earnings.