Business consultant says National Credit Guarantee Company will transform Nigeria’s economy

Biodun Adedipe, founder of B. Adedipe Associates Limited, says the National Credit Guarantee Company (NCGC) represents a critical step forward that could be transformational for the economy.

Adedipe spoke during his presentation titled ‘Unlocking Credit for Nigeria’s Industrial Sectors: Risk Sharing Framework’ at a stakeholders meeting of the NCGC on Monday.

The business consultant said Nigeria’s economic progress has been hindered by skipping the mid-scale and high-tech manufacturing phase that typically drives industrial growth.

“In development economics, nations are profiled to evolve in three stages of: Agricultural products and small-scale manufacturing, Shift into mid-scale and high-tech manufacturing, and Entrenched in services,” he noted.

“Nigeria skipped the second stage, thus shunting from Stage 1 to Stage 3. This has been a cog in the country’s economic development, which has delivered only jobless growth!

“Any advanced or emerged economy is a proven case of the importance of manufacturing. It is the bedrock of job creation, supply for domestic consumption as well as non-oil exports.”

Adedipe said the essence of a credit guarantee is to offer fallback support for transactions that are appealing to lenders but lack adequate security, which he described as a core challenge in Nigeria’s credit environment.

He said the country has already addressed several institutional gaps in its credit market, such as credit registries, collateral registries, and insolvency frameworks.

Adedipe further said the NCGC is a long-awaited institutional intervention in the Nigerian credit market.

“It is that component of the credit market that can strongly drive inclusive growth and deepen industrial manufacturing,” the founder said.

“All stakeholders should collaborate to make it work. Perhaps the greatest risks are moral hazard and political interference. It has potential to operate profitably.

“The company has started on a good note with well defined modus operandi and mechanics, and it has a solid leadership team.”

On May 29, President Bola Tinubu established the NCGC, with an initial capital of N100 billion.

Tinubu also approved the constitution of the NCGC board, appointing Yakubu Dogara, former speaker of the house of representatives, as chairman.

The company is designed to de-risk lending and boost access to finance for micro, small, and medium enterprises (MSMEs).

The NCGC is also expected to serve small corporates, manufacturers, consumers, and large enterprises across Nigeria.