The Nigerian president has approved an additional 100 billion naira to be channeled through the Bank of Industry as part of a broader effort to stimulate the economy and provide small businesses with better access to affordable financing. The announcement was made by presidential adviser Sola Johnson during an appearance on Channels Television, where he outlined the government's commitment to transforming the business environment for entrepreneurs across the country.
The domestic funding comes on top of a significant international injection. The African Development Bank approved an additional 200 million dollars for the Bank of Industry just two weeks ago, further bolstering the financial resources available to support small and medium enterprises across Nigeria. This latest tranche is expected to significantly expand the reach of lending programs aimed at reducing the financing gap that has long plagued Nigerian entrepreneurs.
A key innovation in the government's approach is the introduction of risking funds in partnership with state governments. Under this model, a state government guarantees a certain amount of capital, which is then matched by a commercial bank partner. Johnson cited Lagos as a leading example, where the state contributed 10 billion naira and a commercial bank matched it with another 10 billion, creating a fund that lends to SMEs at no more than nine percent interest.
The adviser noted that numerous state governors are now entering similar partnerships with commercial banks and development finance institutions. We want to ensure from 2027 that access to funding at single digits becomes a norm, not just something we talk about, across different states, Johnson said, describing this as one of the government's major priorities for the coming year.
Johnson, who emphasized that he himself came from the nano and micro business space before rising to his current advisory role, stressed that the government is genuinely committed to supporting entrepreneurs at every stage. We are going to uphold you with your business and ensure that you survive in whatever it is that you are doing, he told viewers, acknowledging that while the business environment is not yet at one hundred percent, significant progress has been made since 2023.
The government is also preparing to celebrate the achievements of small businesses through the MSME Awards, scheduled for June 27 to coincide with the United Nations-designated MSME Day. Johnson revealed that this year's awards will include funding, grants and money for winning entrepreneurs, with registration already closed due to high demand from businesses across the country.
The combined impact of federal funding, international development finance and state-level partnerships represents what analysts describe as the most comprehensive effort to address small business financing in Nigeria in decades. However, challenges remain, including the high cost of doing business, inconsistent power supply and bureaucratic hurdles that continue to impede the growth of enterprises outside major urban centres.