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CPPE urges CBN to rethink development finance, says real sector faces N50tn funding gap
The Centre for the Promotion of Private Enterprise (CPPE) has urged the federal government and the Central Bank of Nigeria (CBN) to overhaul the country’s development finance framework, warning that Nigeria’s productive sectors face a financing shortfall of more than N50 trillion.
In a policy brief released on Sunday and signed by CPPE’s CEO, Muda Yusuf, the advocacy group argued that the country’s current financial system cannot provide the affordable, long-term funding needed by manufacturers, farmers, agribusinesses, exporters, and micro, small, and medium-sized enterprises (MSMEs).
CBN had earlier curtailed its development finance interventions to concentrate on its primary mandate of ensuring price and monetary stability.
The organisation, CPPE, said the financing constraints stem from structural market failures rather than a shortage of liquidity, citing high lending rates, short loan tenors, stringent collateral requirements, limited risk appetite among lenders and inadequate patient capital.
“CPPE estimates a conservative current real-sector financing gap of over N50 trillion when account is taken of unmet financing needs across manufacturing, agriculture, agribusiness, MSMEs, supply chains and export-oriented enterprises,” CPPE stated.
According to the group, agriculture contributes more than one-fifth of Nigeria’s Gross Domestic Product (GDP) but has historically received less than five per cent of total banking sector credit, while manufacturers require medium- and long-term financing to invest in machinery, technology, factory expansion, energy infrastructure and export development.
It argued that such investments cannot be financed sustainably through short-term commercial bank loans offered at prevailing interest rates.
Financing constraints
CPPE said the current monetary policy stance has further widened the financing gap, noting that the CBN’s benchmark Monetary Policy Rate (MPR) of 26.5 per cent and the Cash Reserve Requirement (CRR) of 45 per cent for deposit money banks have pushed commercial lending rates beyond levels that many productive investments can support.
While acknowledging that the CBN’s monetary tightening has improved policy credibility, exchange-rate stability and inflation management, the organisation said monetary stability should ultimately support economic growth rather than constrain productive investment.
“Price stability and development finance should not be treated as mutually exclusive objectives. In an economy characterised by deep financing gaps, market failures and severe supply-side constraints, monetary stability must be complemented by carefully targeted, transparently governed and non-inflationary development finance interventions to support manufacturing, agriculture, agribusiness and other strategic productive sectors,” CPPE said.
It added that Nigeria faces the difficult task of maintaining restrictive monetary conditions to contain inflation while ensuring businesses have access to affordable, long-term capital needed to expand production and create jobs.
“The answer is not indiscriminate monetary expansion. It is a carefully designed development-finance framework targeted at identifiable market failures and structured to preserve monetary-policy credibility,” CPPE said.
Drive industrialisation
The organisation argued that expecting conventional commercial banks to finance Nigeria’s industrialisation and agricultural transformation is unrealistic because banks largely mobilise short-term deposits, whereas productive sectors require financing extending over five to ten years or longer.
It also identified information asymmetry, heavy dependence on landed property as collateral, and sovereign borrowing as key factors discouraging lending to productive businesses.
“Commercial credit decisions, driven primarily by risk-adjusted private returns, tend to underfund productive sectors relative to their broader economic and social value.
This represents a classic market failure and provides a compelling economic justification for well-targeted development finance interventions,” it stated.
Reform
Although CPPE acknowledged governance shortcomings associated with previous CBN intervention programmes, including weak loan recovery, political interference, beneficiary selection challenges, and quasi-fiscal risks, it said those weaknesses justify reforms rather than abandoning development finance altogether.
“These shortcomings provide a compelling case for reform, not retreat. Implementation failures should not be confused with the absence of genuine market failures in Nigeria’s financial system,” the organisation said.
It proposed replacing direct intervention lending with a modern framework that is market-driven, transparent and anchored on risk-sharing.
Under the proposed model, the CBN would serve mainly as a catalyst, refinancer and risk-sharing institution, while development finance institutions and commercial lenders would retain responsibility for loan appraisal, disbursement and recovery.
READ ALSO: US 12.5% tariff unlikely to hurt Nigeria – CPPE
Recommendations
CPPE called on the government and the apex bank to strengthen the country’s development finance architecture by reconsidering the retreat from development finance and refraining from returning to discretionary intervention lending.
It also advised the apex bank to recapitalise and strengthen the Bank of Industry and the Bank of Agriculture to serve as the main channels for long-term financing.
CPPE urged the regulator to expand partial credit guarantees and risk-sharing schemes for manufacturing, agriculture, exports and MSMEs, while also creating specialised long-term refinancing windows for manufacturing and agricultural value chains.
It also asked the government to expand supply-chain financing, warehouse receipt systems, receivables financing, and movable collateral frameworks, and to improve credit information systems and technology-driven risk assessment.
The advocacy group urged the government to mobilise pension, insurance and capital market funds for productive, long-term investments and to reduce government borrowing that crowds out private-sector credit.
It added that the government should strengthen governance, transparency, loan recovery and independent performance evaluation.
Inflation control
CPPE also argued that properly designed development finance is compatible with the CBN’s price stability objective because much of Nigeria’s inflation is driven by structural supply constraints rather than excess demand.
“The critical distinction is between financing consumption, which principally expands demand, and financing productive capacity, which expands supply,” it stated.
The organisation said financing investments in agriculture, manufacturing, energy, storage and logistics would increase productive capacity and help moderate inflation over time.
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A passenger has died aboard a Kenya Airways flight from Nairobi to Lagos after becoming unresponsive about 20 minutes before the aircraft landed at the Murtala Muhammed International Airport, Lagos.
Kenya Airways confirmed the incident in a statement on Wednesday, saying the medical emergency occurred at about 9:20 p.m. Nigerian time on Tuesday.
The airline said its crew administered first aid to the passenger in line with their training and followed emergency procedures before the aircraft landed at 9:41 p.m.
“Upon landing at Murtala Muhammed International Airport at 21:41 hrs, the aircraft was met by medical personnel, and upon further examination, the medical personnel confirmed that the passenger had passed away,” the airline said.
Kenya Airways expressed condolences to the passenger’s family and friends and said it was providing support in coordination with the family, local authorities and aviation regulators.
The airline did not disclose the identity of the passenger or the cause of death, saying it would respect the privacy and dignity of those involved.
NCAA responds
Responding to the incident, Michael Achimugu, Director of Public Affairs and Consumer Protection at the Nigeria Civil Aviation Authority (NCAA), said the police have taken over the investigation.
Mr Achimugu said he was briefed by Kenya Airways’ country manager on Wednesday morning.
According to him, the passenger had reportedly been picked up in Madagascar after authorities there denied him entry and was being returned to Nigeria by Kenya Airways.
He said the airline was expected to return the passenger because it had transported him to Madagascar.
“The country manager said he was picked from Madagascar, after customs had earlier denied him entry into the country, and as expected, the airline that brought him into the country must take him back,” Mr Achimugu said.
He further said the passenger allegedly became restless and aggressive during the return flight, attempted to gain access to the cockpit and later tried to open the rear door of the aircraft.
He explained that the passenger was subsequently restrained by members of the crew.
“When he got into the aircraft, he became restless and aggressive inside the aircraft, wanted to enter the cockpit and later wanted to open the rear door, but was later tied down. His hands were tied to his back to ensure that he stopped the troubles,” he said.
Mr Achimugu said the passenger was pronounced dead after the aircraft arrived in Lagos.
“But when he got to Nigeria, he was declared dead on arrival. I don’t want to pre-empt the police investigation, but they have taken it over for now,” he said.
He added that the deceased’s family could request an autopsy as the investigation progresses.
Police begin investigation
The spokesperson for the Airport Command of the Nigeria Police Force, Muhammed Adeola, confirmed that an investigation had commenced.
Mr Adeola said the incident involved an “inadmissible passenger” and that complications reportedly developed during the return flight.
“Yes, it’s true, and investigations have commenced. It’s an issue of an inadmissible passenger, and the said complications arose on their way back,” he said.
He said the passenger became unable to breathe before medical personnel were alerted ahead of the aircraft’s arrival.
Mr Adeola said the police have taken statements from members of the flight crew, including the captain.
He added that the body had been deposited at a morgue in Ikeja.
Similar incident
The death is not the first reported case of a passenger dying aboard an international flight bound for Lagos.
In March 2019, a 54-year-old passenger aboard a Delta Air Lines flight from Atlanta, United States, to Lagos was found unresponsive shortly before the aircraft landed at the Murtala Muhammed International Airport.
The passenger was confirmed dead after the aircraft landed, with medical personnel meeting the flight at the airport.
Medical emergencies have also led to international flights returning to Lagos.
In September 2025, PREMIUM TIMES reported that a United Airlines flight from Lagos to Washington, D.C., returned to Lagos after a passenger suffered a medical emergency about 90 minutes into the journey. Medical personnel attended to the passenger after the aircraft landed.
Kenya Airways said it is providing the necessary support in coordination with the deceased passenger’s family, local authorities and aviation regulators.
The airline also apologised for any inconvenience the incident may have caused other passengers.
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