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OPPORTUNITIES IN THE NIGERIAN MANUFACTURING SECTOR
Omolara Akinfolarin
Head, MSME Banking
Sterling Bank PLC
Nigeria
www.nigeriamanufacturingexpo.com
About Sterling Bank …
Company
Sterling Bank is a full service national commercial
Bank with asset base above $4.4 billion (N842
billion) and shareholders’ funds in excess of
$446.1m (N88.4 billion).
Active Customers > 1,000,000
Headcount >3,000 professional employees
Channels 187 business offices; >840 ATMs; 5,000 POS
Ratings Agency Short Term Long Term
GCR A3 BBB
Brief on Manufacturing Sector in Nigeria
www.nigeriamanufacturingexpo.com
GDP N89.043trn (2014)
3.1% GDP Growth rate
(H1,2015)
9.4% Inflation Rate
(August,2015)
170m Population (48% under 15 years)
Over 250 ethnic groups
Nigeria at a glance
www.nigeriamanufacturingexpo.com
Global trends in Manufacturing
The manufacturing
sector contributes
18% of the US$70trn
global economy,
and accounts for
70% of global trade
Source: United Nations Statistics Division; US
Bureau of Economic Analysis (BEA):
McKinsey Global Institute Analysis
Manufacturing Sector in Nigeria…/1
Manufacturing Sector in Nigeria…/3
The Food, Beverage and Tobacco Sub-sector has the largest market share in the
Manufacturing sub-sector, contributing 49% of the entire sector. It is followed closely
by Textile, Apparel & Footwear (21%) and Cement (7%)
385.82
604.61
4,241.78
1,815.73
238.55
59.93
154.62
259.28
221.95
5.76
195.76
67.14
434.50
Oil Refining
Cement
Food, Beverage and
Tobacco
Textile, Apparel and
Footwear
Wood and Wood Products
Pulp, Paper and Paper
Products
Chemical and
Pharmaceutical Products
Non-Metallic Products
Plastic and Rubber products
Electrical and Electronics
Basic metal , Iron and Steel
Motor vehicles & assembly
Other Manufacturing
Size of the Manufacturing Sub-Sectors (2014, N'bn)
www.nigeriamanufacturingexpo.com
• Non-metallic products
and chemical &
Pharmaceutical products
recorded the highest
growths in the sector in
2014
• This was followed closely
by Textile, Apparel &
Footwear, Plastic & rubber
products and Cement
• The oil and gas refining
sector which is the
mainstay of the Nigerian
economy contracted by
6% in 2014 from 2013.
Manufacturing Sector in Nigeria…/4
-6%
34%
11%
39%
17%
18%
42%
42%
37%
10%
21%
31%
34%
-10% 0% 10% 20% 30% 40% 50%
Oil Refining
Cement
Food, Beverage and Tobacco
Textile, Apparel and Footwear
Wood and Wood Products
Pulp, Paper and Paper Products
Chemical and Pharmaceutical
Products
Non-Metallic Products
Plastic and Rubber products
Electrical and Electronics
Basic metal , Iron and Steel
Motor vehicles & assembly
Other Manufacturing
www.nigeriamanufacturingexpo.com
Breakdown of Sub-Sectors
Manufacturing Sector in Nigeria…/5
Food & Beverage Food - Fish, Palm Kernel, groundnut oil, Palm
oil, Yogurt, Ice-Cream, Garri, Cornflakes, Rice, Starch, Animal Feed, Biscuit, Pastry and Cakes, Bread, Sugar, Chocolate; Beverages – Juice, Alcoholic Drink, Wine, Beer, Malt Drink, Water, Soft Drink
Textiles, Apparels and Footwear
Textiles – Sack, Sewing thread, Cotton, Other woven fabric, Blanket/rug, Window cloth, Tarpaulin, Apparels – Window cloth, Embroidery design, Men’s Wear, Women’s
Wear; Leather – Suit case/luggage, shoe
Chemical & Pharmaceutical
products
Chemicals – Engine Oil, Printing Ink, Zinc Oxide, Fertilizer, Insecticides, Paint, Soap
and Detergent, Cosmetics, Other chemical; Pharmaceuticals - Pharmaceuticals
www.nigeriamanufacturingexpo.com
Breakdown of Sub-Sectors
Manufacturing Sector in Nigeria…/6
Plastic and Rubber Shoe (Plastic), Peeking Case, Nylon, Rubber tubes,
Arabic Gum, Plastic bag, Table Wire/Kitchen, Plastic product, Bucket
Non-Metallic Products Glass bottle, Ceramic mug/vase flower, Block ring, Block, Tiles, Ceiling, School chalks and crayons
Wood and Wood Products
Plank, Plywood
Pulp, Paper and Paper products
Paper – Corrugated Paper, Toilet Roll, Sanitary towels, Napkins and Diapers, Paper Label, Notebook/Account; Printing – Printing, Notebook/Account
www.nigeriamanufacturingexpo.com
The Nigerian Industrial Revolution master Plan (NIRP)
Manufacturing Sector in Nigeria…/7
• The NIRP is a 5-yr plan to
accelerate the build-up of
capacity within Nigeria.
• It is Nigeria’s first strategic,
comprehensive, and integrated
roadmap to Industrialization.
• The NIRP aims at developing four
strategic Industry Groups (with
detailed sub-sectors) where the
country has comparative
advantage Source: Aspirations for economic contribution of Nigerian industry
(Fed. Min. of Trade & Commerce, 2013)
www.nigeriamanufacturingexpo.com
The Nigerian Industrial Revolution master Plan../2
Manufacturing Sector in Nigeria…/8
Strategic Industry Groups
Agribusiness & Agro Allied
• Food processing (specifically beverages, packaged food products)
• Sugar
• Palm oil processing
• Cocoa Processing
• Leather & Leather products
• Rubber Products
• Textile & Garments
Solid Minerals & Metals
• Cement
• Basic Steel
• Aluminum
• Chemical
• Auto Assembly
Oil & Gas Related Industry
• Petrochemicals
• Fertilizers
• Methanol
• Plastics
• Refineries (with Oil & Gas Ministry)
Construction, Light
Manufacturing & Services
• Light Manufacturing (consumer and home goods)
• Services
www.nigeriamanufacturingexpo.com
Growth Drivers/ Opportunities
Expanding youthful
Population; Expanding
Markets
Urbanization; Increasing
Market Concentrati
on
Emerging middle class;
Increasing spending
power
Acquisitions and
expansions
Recent economic downturn
www.nigeriamanufacturingexpo.com
Manufacturing Sector in Nigeria…/9
Products ban
Import substitution
Product packaging
and differentiation needs
Growing food
consumption -73%
spent on food
Low barrier to entry
Manufacturing Sector in Nigeria…/10
Challenges
www.nigeriamanufacturingexpo.com
Funding Infrastructural
deficit Regulatory challenges
Reliance on crude oil
Preference for imported
goods
Lack of skilled manpower
Nigeria’s manufacturing sector’s share in the Gross Domestic Product (GDP)
remains minuscule at about 4.23% (CBN, 2013) with just 17% playing in the sector
Strong manufacturing sectors in other emerging economies contribute as high
as 20 percent of GDP in Brazil, 34 percent in China, 30 percent in Malaysia, 35
percent in Thailand and 28 percent in Indonesia (Ogbu, 2012)
Sterling Bank’s Intervention
www.nigeriamanufacturingexpo.com
CAPACITY BUILDING
BESPOKE FUNDING
SUSTAINABLE GROWTH IN THE
MANUFACTURING SECTOR
Financing Opportunities for
MSMEs in Sterling Bank Plc
• A holistic and integral
framework of value-add
offerings that will inspire,
nurture, mentor and
manage specific MSME
types from micro to
medium.
• This product is called
the SUPA Business
Proposition which comes
in three variants
www.nigeriamanufacturingexpo.com
Our SUPA offering: Financial
www.nigeriamanufacturingexpo.com
Unsecured overdraft
• One year facility of up to N2.5m with a 30 day clean upcycle
Secured Overdraft
• One year facility of up to N25mm with a 90 day clean upcycle
Term / Time loan
• Up to N20mm available over a tenor of up to 48months for asset acquisition and business expansion.
• Also covers invoice discounting, contract and LPO Financing
Our SUPA offering: Non Financial
www.nigeriamanufacturingexpo.com
e-Solution for inventory management, daily business operations and book-keeping (ERP)
Access to the MSME Capacity Building Workshop Academy
Access to Business Advisory services Helpdesk
Access to Market Arena
Meet the Executive Program to empower aspiring entrepreneurs
INTERVENTION FUND
N220 BILLION CBN MICRO, SMALL & MEDIUM ENTERPRISES DEVELOPMENT FUND (MSMEDF)
www.nigeriamanufacturingexpo.com
To enable Banks, existing SMEs and prospects access the MSMEDF funds in order
to increase their productivity, output,
employment and engender inclusive growth.
The fund is spread as follows: 60% (Women), 30% (Others) and 10% (For new
businesses).
To enhance and improve Bank’s access to increased
long term and low cost liquidity to support the SME
Business.
TERMS & CONDITIONS
• Only SMEs in Manufacturing,
Agricultural Value Chain activities,
Renewable energy/Energy efficient
product and Technologies,
Educational Institutions and income
generating Enterprises as advised by
CBN
www.nigeriamanufacturingexpo.com
Single Obligor Limit
• Minimum of N5 Million per customer
• Maximum of N50 Million per customer
• For working capital purpose: customer can only access 50% of average monthly credit turnover of the customer over a period of 12 months account statement
Tenor
• Maximum of 3 years for SME Working Capital
• Maximum of 5 years for SME term loan
• Moratorium of 12months
Pricing and Other Conditions
• All in pricing of 9%
• Funds must be disbursed within 5 days of receipt from CBN
• Max. 70% of the average monthly positive net credit turnover of the customer (over a period of 12 months account statement with the Bank or any other Bank) shall be required to service the loan rentals.
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OTHER FINANCING SCHEMES
• Cluster financing e.g. ASBON, NASME etc.
• Distributor / value chain financing
• Asset Financing
• Sterling Alternative Financing
www.nigeriamanufacturingexpo.com
Success Factors
Success Factors Technology
Standardization, streamlining and
outsourcing
Innovation
Financials
Labor Force
www.nigeriamanufacturingexpo.com
CONTACT US
www.nigeriamanufacturingexpo.com
20 Marina, Lagos, Nigeria
Tel: 234-(01) 2600420-9; 234-(01) 4613152
Website: www.sterlingbankng.com
Omolara Akinfolarin
Head, MSME
+234 8055095588
Thank You!
www.nigeriamanufacturingexpo.com