FG Allocates Up to 5 % of GDP to Industrial Financing Under New National Policy
New Policy Signals Nigeria’s Push for Industrial Transformation
The Federal Government of Nigeria has committed to allocating up to five per cent of the nation’s Gross Domestic Product (GDP) to industrial financing, a central pillar of the newly released Nigeria Industrial Policy (NIP) 2025. The policy, unveiled by the Federal Ministry of Industry, Trade and Investment, seeks to stimulate domestic production, enhance export competitiveness, and drive sustainable job creation through targeted financing mechanisms and public-private partnerships.
Policy Overview: Resource Commitment and Strategic Intent
The Nigeria Industrial Policy 2025 underscores that robust financing is a prerequisite for successful industrial transformation. To this end, the framework formalises a commitment to channel up to 5 % of GDP annually into industrial financing, leveraging both public resources and private capital participation.
Industry experts say that such a financing threshold is significant by historical Nigerian standards, where industrial funding has often been constrained by fiscal limitations and high competing budget priorities. By institutionalising a multi-year funding envelope tied to GDP, the policy aims to ensure a predictable flow of capital for industrial expansion and structural transformation.
Core Components of Financing Architecture
Recapitalisation of the Bank of Industry
A flagship element of the policy is the recapitalisation of the Bank of Industry (BOI) to ₦3 trillion by 2026. This injection is designed to strengthen the institution’s ability to provide long-term capital at competitive rates to manufacturers, agro-processors, and other priority sectors.
Sector Intervention Funds and Credit Guarantees
In addition to BOI recapitalisation, the policy increases sector-specific intervention funds often managed in coordination with the Central Bank of Nigeria (CBN) and mainstreams credit guarantee schemes for micro, small and medium enterprises (MSMEs). Innovative financing tools such as interest-drawback programmes and equity-based instruments are also being introduced to de-risk private investment.
Public-Private Partnerships (PPPs)
The financing model formally embeds public-private partnerships as a core mobilisation strategy. By crowding in private capital alongside public funds, the framework aims to bridge funding gaps and leverage specialised operational expertise across industrial activities.
Policy Goals: Diversification and Competitiveness
The Nigeria Industrial Policy 2025 sets ambitious targets to recalibrate the economy’s structure. Key objectives include:
Reviving dormant factories and modernising production capacities.
Strengthening export performance through value addition and integration into global value chains.
Driving sustainable employment growth, particularly in manufacturing, agro-processing, and related industries.
The policy also consolidates fiscal, monetary, export and industrial measures into a unified strategy to reduce import dependence and enhance local content across sectors.
According to supplementary analysis, industrial financing under the new framework is expected to expand Nigeria’s manufacturing share of GDP to 15 % by 2030 and 25 % by 2035, while also advancing the contribution of mining and other productive sectors.
Economic and Policy Implications
Enhancing Long-Term Capital Availability
One of the key limitations of Nigeria’s industrial landscape has been restricted access to long-term capital, largely due to underdeveloped domestic savings, high lending rates, and risk-averse financial systems. Institutionalising a GDP-linked financing commitment directly addresses this constraint by ensuring predictable capital allocation.
Boosting Investor Confidence
By embedding transparent funding mechanisms and expanding credit guarantees, the policy is designed to strengthen investor confidence, particularly among domestic and foreign capital providers who have historically flagged access to finance and policy inconsistency as key constraints to scaling production and investment.
Alignment With Broader Economic Strategy
The financing commitment ties into Nigeria’s broader ambition to diversify the economy away from oil dependence and build resilient non-oil sectors. If effectively implemented, the strategy could support industrial linkages, stimulate export growth, and enhance job creation.
Nigeria’s decision to allocate up to five per cent of GDP to industrial financing represents a major policy shift in how the government approaches industrial development. By bolstering development finance institutions, expanding intervention funds, and integrating PPPs into the funding architecture, the Nigeria Industrial Policy 2025 lays out a structured roadmap for capitalising production activities, strengthening value chains, and enhancing economic competitiveness. The success of this framework will hinge on effective implementation, inter-agency coordination, and private-sector engagement to translate policy commitments into measurable industrial outcomes.
