Nigeria should buoy up production capacity to achieve $1trn economy -BoI

The Bank of Industry (BoI) has said Nigeria must give more energy and crank up its production capacity towards attaining a one trillion-dollar economy by 2026.

The Divisional Head, Services, Bank of Industry, Dr. Isa Omagu made this known at the annual workshop of Finance Correspondents Association of Nigeria (FICAN) held at the weekend in Lagos with the theme, ‘Nigeria’s Journey Towards $1 Trillion Economy: Impact of Banks’ Re-Capitalization, Opportunities for Fintechs, Real Sector’.

Speaking as one of the panelists at the event, Omagu said: “The economy stands on both the monetary and fiscal sides, we need both sides to work together. While the monetary side is trying to stabilize prices which is their primary mandate, we also need the fiscal side on the issue of governance to come in.”

He noted that lack of production has been the challenge, saying “we are not producing enough, and we cannot continue to consume imported goods and expect the economy to be robust.”

He called for support in the productive sector of the economy, saying “if we continue to invest in agriculture, infrastructure and services to a reasonable extent, this will drive production that will minimize importation into the country, and the pressure on our forex will go down.”

On government intervention in the last six months, Omagu said that “from BoI as a government institution, one of the things we are doing in boosting production is by supporting Small and Medium-Scale Enterprises.”

According to him, if we continue to support them in production,  it will reduce pressure on importation as this will boost backward integration and there will be reduction in the importion of some of the raw materials used for production.

Omagu added that the only thing the country may be importing is equipment, but any raw material going into the production should be sourced locally.

He pointed out that “we cannot achieve a $1 trillion economy without focusing or boosting our production capacity.”

Omagu added that “there is a N200 billion Naira integration fund, N50 billion grant for SMEs in the rural areas and currently, we have disbursed up to 98 per cent of the money; N50,000 per beneficiary.

“Then there is N5 billion for SMEs, it is a loan payable over a long period of time, and it is at a single rate. This is supposed to help SMEs to access funding, which is always a very key condition that you have when they are trying to do business.”

He noted that “there is a fund for one million SMEs and another one for large enterprises who are into manufacturing. The Funds are given at a single digit rate, up to seven years period, which will enable them to bring in equipment to be able to do their business.

“Hopefully, all these initiatives will grow employment, minimize import dependency and we will be able to produce for export. This will also help in having Non-Oil FX coming into the country.”

The FICAN 2024 annual conference, which gathered key players in the financial sector, provided an opportunity for in-depth discussions on the future of Nigeria’s economy, the role of banks, and the opportunities for Fintech to drive inclusive growth.