The Central Bank of Nigeria, CBN, has sustained its intervention in critical sectors of the economy following shocks occasioned by ongoing external threats and to correct some of the existing structural failures of the country’s economy.
Between July and August 2022, the Apex bank has released substantial amount of money under its intervention strategy to boost the productive sector.
Speaking in Lagos at the 57th Annual Bankers Dinner, Governor of the Bank, Godwin Emefiele, recalled releasing the sum of ₦66.99 billion under the ₦1.0 trillion Real Sector Facility to 12 additional projects in manufacturing and agriculture.
According to him, To support productivity in view of the ongoing external threats and, especially, to correct some of the existing structural failures of the Nigerian economy, the CBN sustained its various interventions.
Essentially, these focused on stimulating productivity in manufacturing sector, bolstering domestic industries, revolutionising agricultural output to ensure self-sufficiency and shield the local economy from harmful external shocks.”
Breaking down the Intervention strategies, Emefiele, said some of the activities in the agriculture sector indicated that between July and August 2022, under the Anchor Borrowers’ Programme (ABP), the Bank disbursed N54.82 billion to several agricultural projects, bringing the cumulative disbursements under the Programme to ₦1,026.27 trillion to over 4.6 million smallholder farmers cultivating 21 different commodities across the country.
The Bank also released N0.70 billion to finance large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS), bringing the total disbursements under the Scheme to ₦745.02 billion for 679 projects in agro-production and agro-processing.
Furthermore, under the 100 for 100 Policy on Production and Productivity (PPP), the Bank has disbursed the sum of ₦20.17 billion to 14 projects in healthcare, manufacturing, and services. This brings the cumulative disbursements under the facility to ₦93.39 billion to 62 projects across manufacturing, agriculture, healthcare, and services.
As part of efforts to help resuscitate Nigeria’s textile industry and promote economic development in the textile and garment sector, the Bank released the sum of ₦1.50 billion under the textile sector intervention facility (TSIF), bringing the total disbursements under the scheme to ₦97.80 billion.
In support of the resilience of the healthcare sector, the Bank also disbursed ₦4.00 billion to two (2) healthcare projects under the Healthcare Sector Intervention Facility (HSIF), bringing the cumulative disbursements to ₦130.54 billion for 131 projects, comprising 32 pharmaceuticals, 60 hospital and 39 other services.
Continuing, Emefiele, recalled that under the export development fund (EDF) and export facilitation initiative (EFI), the Bank funded several projects for non-oil export commodity value-addition and production with the sums of N11.89 billion and N3.24 billion, respectively.
In the MSME sector, the bank supported entrepreneurship development with the disbursement of the sum of N39.26 million to youth under the tertiary institutions entrepreneurship scheme (TIES), bringing the total disbursement under this intervention to N332.43 million.
Comparative Emerging Markets Assessment
In a short review of the country’s recovery efforts and current outcomes, he affirmed that the Nigerian economy and its banking system has faired comparably well when juxtaposed with peers.
“Like many EMDEs, Nigeria’s GDP growth rate has so far remained positive even as global conditions plunge deeper into stormy waters.
Inflation rates among comparator economies have however soared in consonance with global trends. A quick comparison of the rates for September 2022 indicates that Nigeria’s inflation, at 20.77 percent, is high but not among the worst. We have seen hyper inflations, above 80 percent, in Turkey and Argentina. Ghana and Ethiopia also had rates above 30 percent.”
Interestingly, in terms of the pace of inflation acceleration, Nigeria rate is among the slowest, as inflation grew from about 16 percent in October 2021 to 21.09 percent, he said adding, “Over the same interval, Morocco’s inflation rate rose five folds from 1.7 percent to 8.3 percent. The rate in Ghana rose more than three folds from 11 percent to 37.2 percent.”