The Alliance for Economic Research and Ethics has called on the Central Bank of Nigeria (CBN) to urgently clear the outstanding $2.4 billion foreign exchange forward contract backlog owed to manufacturers.
The group stressed that the unresolved obligations are undermining confidence, weakening industrial growth, and threatening the country’s economic transformation.
It made the call in its July 2026 Policy Brief titled ‘From ₦644.9 Billion to a Trillion-Dollar Dream: Why Nigeria’s Manufacturers Need More Than Applause.’
It commended the Bank of Industry (BOI) for disbursing ₦644.9 billion in 2025, supporting 1.68 million jobs and expanding financing across 14 strategic sectors.
It, however, argued that these achievements would have a limited impact unless long-standing structural constraints facing manufacturers are addressed.
The group acknowledged the BOI’s shift towards measuring development impact rather than simply reporting loan disbursements, saying the institution had demonstrated a stronger commitment to supporting productive sectors of the economy.
It also praised the Federal Government’s renewed focus on industrialisation through the Nigeria Industrial Policy 2026.
Despite the progress, the Alliance said Nigeria’s manufacturing sector remains under severe pressure, noting that BOI’s intervention is too small relative to the country’s industrial financing needs.
According to the report, the manufacturing sector is operating at less than 50 per cent of its installed capacity, while declining manufacturing tax revenue in the first quarter of 2026 signals weakening production and lower sales across the industry.
The report identified the unresolved $2.4 billion foreign exchange forward contracts as one of the biggest challenges confronting manufacturers.
It said many businesses entered into forward foreign exchange agreements with the CBN to protect themselves against currency volatility, paid their naira obligations and expected dollar settlements. Instead, they received refunds in naira several years later after the currency had lost more than 70 per cent of its value.
“This $2.4 billion unresolved backlog is not merely a policy failure; it is a fundamental breach of trust that undermines the credibility of the Central Bank, local banks, and the broader economy,” the Alliance stated.
It urged the apex bank to immediately honour the outstanding contracts and, where foreign reserves are insufficient, explore alternative financing options, including support from development partners, sovereign guarantees and dollar-denominated bonds dedicated to clearing the backlog.
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Seeks Lower Lending Rates, Industrial Reforms
Beyond the foreign exchange issue, the Alliance said high borrowing costs continue to constrain manufacturing investment, noting that while the BOI lends to small businesses at 13 per cent and larger firms at 15 per cent, commercial bank lending rates of about 35 per cent remain unsustainable for productive businesses.
To improve access to affordable finance, the organisation called on the CBN to introduce a maximum lending rate of 15 per cent for loans to manufacturers, agriculture and technology firms.
It also recommended tax incentives and preferential access to CBN liquidity windows for banks that comply with the policy.
The report further urged the Federal Government to reduce deficit financing and public borrowing, arguing that excessive government borrowing crowds out private sector access to credit and contributes to persistently high interest rates.
It also called for stronger fiscal discipline, including reducing wasteful public spending and redirecting savings towards infrastructure and industrial development.
To strengthen industrial competitiveness, the Alliance recommended accelerating the implementation of the Nigeria Industrial Policy 2026, restoring tax incentives for businesses operating in Free Trade Zones, expanding the National Credit Guarantee Scheme and establishing industrial clusters with dedicated power supply.
It also advocated deeper capital market reforms to improve manufacturers’ access to long-term financing.
The organisation maintained that Nigeria’s long-term revenue growth depends on expanding production rather than increasing taxation.
“Production is the only sustainable source of revenue,” the report said, adding that stronger manufacturing would create jobs, increase exports, improve foreign exchange earnings and ultimately boost government tax collections.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X