CPPE seeks reform of development finance
Lagos, Aug.2026 (TBL Africa) The Centre for the Promotion of Private Enterprise (CPPE) has called for comprehensive reforms to Nigeria’s development finance architecture to bridge a financing gap exceeding N50 trillion.
The organisation said the deficit was limiting growth across manufacturing, agriculture, agribusiness, micro, small and medium enterprises, and export-oriented businesses.
CPPE Chief Executive Officer, Dr Muda Yusuf, made the call in a policy brief issued on Sunday in Lagos.
Yusuf said Nigeria’s productive sectors faced structural financing constraints driven by high lending rates, short loan tenors and stringent collateral requirements.
He added that limited access to long-term capital remained a major challenge for businesses seeking to expand operations and improve productivity.
He noted that the problem reflected deep market failures rather than a simple shortage of liquidity within the financial system.
Yusuf estimated the country’s real sector financing gap at more than N50 trillion, covering unmet funding requirements across critical productive sectors.
He noted that agriculture contributes more than one-fifth of Nigeria’s Gross Domestic Product but historically receives less than five per cent of bank credit.
He said manufacturers required affordable long-term financing for machinery acquisition, factory expansion, technology upgrades, energy infrastructure, automation and export development.
Yusuf said such investments could not be sustainably financed through expensive short-term commercial bank loans.
He observed that prevailing monetary conditions had further widened the financing gap facing productive enterprises across the economy.
Yusuf said the Monetary Policy Rate of 26.5 per cent and Cash Reserve Requirement of 45 per cent increased lending costs.
He said commercial lending rates had risen beyond levels that many productive businesses could reasonably sustain.
Yusuf acknowledged efforts by the Central Bank of Nigeria to restore monetary policy credibility, stabilise the exchange rate and moderate inflationary pressures.
However, he stressed that monetary stability should support investment, productivity growth, employment generation and sustainable economic development.
“Price stability and development finance should not be treated as mutually exclusive objectives,” Yusuf said.
He argued that carefully targeted and transparently managed development finance interventions could complement monetary policy without creating inflationary pressures.
Yusuf maintained that commercial banks alone could not finance Nigeria’s industrialisation because they largely depended on short-term deposits.
He identified information asymmetry, rigid collateral requirements and sovereign crowding-out as significant obstacles to productive sector lending.
According to him, manufacturing and agriculture generate wider economic benefits, including employment creation, food security, export earnings and technology transfer.
He added that these sectors also support foreign exchange conservation and broader economic competitiveness.
Yusuf said such benefits justified well-designed development finance interventions aimed at correcting market failures.
He acknowledged governance weaknesses in previous intervention programmes but insisted that reforms remained preferable to abandoning development finance initiatives.
According to him, Nigeria requires a modern development finance framework that is rules-based, transparent and insulated from political interference.
Yusuf recommended recapitalising the Bank of Industry and the Bank of Agriculture to strengthen long-term financing for productive sectors.
He also urged government to expand credit guarantee schemes and establish longer-tenor refinancing windows.
Other recommendations included promoting supply-chain financing and cash-flow-based lending models to improve credit accessibility.
Yusuf further advocated improvements in credit information systems and mobilisation of pension and insurance funds for productive investments.
He also called for reduced government borrowing from the domestic market to free more credit for private enterprises.
The CPPE boss stressed the need for stronger governance, transparency and accountability in development finance programmes.
He explained that properly designed development finance could expand production, improve food supply and reduce structural inflation over time.
Yusuf urged policymakers to adopt a balanced approach that preserves monetary stability while ensuring affordable long-term financing for productive investments.
He said closing the financing gap was essential for industrialisation, agricultural transformation, job creation, export diversification and long-term economic competitiveness.
