Federal Gov’t Plans Committing 5% Of GDP To Industrial Development Financing

The federal government is hoping to channel up to 5 per cent of the country’s gross domestic product (GDP) annually into industrial development. The aim is to reposition the economy toward large-scale production, export competitiveness and job creation.

The plan is contained in the Nigeria Industrial Plan (NIP) launched in Abuja last week.

The policy consolidates fiscal, monetary, export and industrial measures into a single national framework.

It seeks to accelerate Nigeria’s industrial transformation by deploying the country’s natural and human capital toward inclusive and sustainable manufacturing growth, deeper diversification and mass employment.

A central pillar of the framework is an aggressive financing target. Government plans to recapitalise the Bank of Industry to N3 trillion by 2026 and expand sector-specific intervention funds, largely domiciled with the Central Bank of Nigeria, to increase the flow of long-term capital to priority sectors.

However, the policy does not set out detailed plans on the sources and structure of the proposed funding.

The policy sets clear output targets. Manufacturing is projected to contribute 15 per cent to GDP by 2030 and 25 per cent by 2035, while mining is expected to rise to eight per cent by 2030 and 10 per cent by 2035. Four sectors have been identified for immediate focus: metals and solid minerals, oil and gas, construction and manufacturing.

Minister of State for Industry, John Owan Enoh, described the policy as a decisive shift in national priorities. The new framework introduces a consolidated incentive architecture aligned with the Nigeria Tax Act 2025.

A key feature is the Economic Development Incentive, which replaces the Pioneer Status Incentive.

Under the revised system, tax relief is tied to measurable outcomes such as investment levels, production capacity and employment generation in priority sectors.

The policy introduces an interest drawback scheme for Micro, Small and Medium Enterprises (MSME). Rather than offering upfront subsidised rates, eligible firms will pay commercial interest rates and receive partial refunds after meeting agreed performance milestones, including job creation or export growth.

Vice President Kashim Shettima said successful industrialisation would depend on coordination across multiple sectors. “As we advance the work of industrialisation, we must be clear-eyed about what it demands. It requires deliberate coherence across energy, trade, infrastructure, finance, skills and innovation. Above all, it calls for a purposeful partnership between government and the private sector, working in alignment to deliver sustainable, inclusive growth,” Shettima said.

The policy also emphasises technology and sustainability. It identifies automation, robotics and digital manufacturing as central to future operations and calls for expanded research and development in priority areas. It sets a target of achieving 25 per cent renewable energy use in the industrial sector by 2030 and aligns industrial expansion with Nigeria’s Energy Transition Plan and its net-zero ambition by 2060.

On human capital, the framework proposes a revamp of Technical and Vocational Education and Training programmes to build a high-value, locally relevant manufacturing workforce. It also seeks to harmonise the roles of academia, public institutions and the private sector to strengthen industrial skills and innovation.