Yemisi Izuora
The Central Bank of Nigeria, CBN has reiterated its commitment to promote agriculture development in the country, and is also determined to restrict foreign exchange access to importation of products that can be manufactured in-country.
The Bank regrets that Nigeria’s economy has depended mainly on importation of foreign goods exposing it to global shocks as oil remains the country’s key revenue generator.
The CBN, in order to counter the adverse effects of the global shocks, has embarked on a number of short- term and long-term policies such as a cycle of monetary tightening to rein in inflation; external reserves management through the restriction of foreign exchange for imports of goods that can be produced in Nigeria.
The Bank has also established a decisive withdrawal of the “de facto” subsidy for the importation of 41 non-essential commodities with unfolding successes, introduced various policies to eliminate FX speculators, bettors, round-trippers and rent-seekers and thereby stabilise the exchange rate with the establishment of the Investors-Exporters Window among others.
Speaking while receiving in Lagos at the weekend the Guardian Economic Personality of the Year 2017 in recognition of his contribution to stabilizing the Nigerian financial sector amidst recession as well as the Bank’s effort in development financing, governor of the Bank Godwin Emefiele said the sum of ₦393.5 billion had been released to 478 large scale agricultural projects since inception in 2010.
Emefiele also said the Bank was poised to disburse up to ₦400 billion at only 9.0 percent interest rate under the Real Sector Support Facility (RSSF), adding that the strategic initiative was targeted at projects in manufacturing and agriculture, given the mutual interdependence of both sectors for the complete industrialization of agro-allied business.
He disclosed that under the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), established in 2011, more than 224 projects valued at over ₦33.0 billion were guaranteed for the Federal Ministry of Agriculture’s Growth Enhancement Scheme.
Under the Anchor Borrowers’ Programme (ABP), he reported that the domestic rice production had increased many folds and its imports had crashed substantially.
While also enumerating the Bank’s intervention efforts in the power sector, which he noted was key to industrialization, as well as the Micro, Small and Medium-Scale Enterprises (MSMEs), which he said was the nucleus of sustainable growth, job creation and poverty reduction, he said the intervention of the CBN in key sectors had resulted in a significant boost in local production.
Emefiele said that as a result of the Bank’s strategic development finance initiatives supported by the dogged implementation of its foreign exchange restriction on certain items, Nigeria had recorded spectacular improvements in domestic production of most items that were hitherto imported.
In spite of the gains recorded by the Bank, he said Nigeria remained significantly below its potential and must ensure that it sustains a properly functioning financial system that channels credits to critical high impact productive real sector.
While noting that a lot still needed to be done if Nigeria must achieve the desired balanced economic growth and development on a sustainable and inclusive level, he stressed the need for a well-coordinated and effective public private partnership to enable Nigeria achieve its potentials.
Emefiele expressed appreciation to The Guardian selecting him for the award and commended the outfit for its foresight and thoughtfulness at publishing the report on “Financing the Economy”.
He noted that the exposure of the Nigerian economy to global shocks was a reflection of the fact that Nigeria, as a country, was unable to sufficiently produce what its people consume; hence the huge dependence on foreign goods.
He attributed the inability of the country to sufficiently produce what it consumes to heavy dependence on oil sector to provide the foreign exchange needed to finance the country’s imports and the poor diversification of the economy and low factor productivity in key non-oil sector. He also identified the ostentatious and elitist taste for imported goods in Nigeria and the inadequate finance to strategic high impact and high employment multiplier sectors as major challenges facing the economy.
While noting that the level of credit in the domestic economy channelled to productive private sector was critically below the levels required to place the Nigerian economy on the path of balanced, sustainable, and inclusive growths, Mr. Emefiele, however, assured that the CBN and the banks in Nigeria would continue to be catalysts to development in Nigeria, particularly as it concerned the vulnerable and needy in the society.
According to him, following a joint initiative by the banks in 2016, each bank contributed five per cent of its profit after tax to support the development initiatives of the government. He further disclosed that the contributions to the fund was nearing the N60 billion mark, adding that the CBN and deposit money banks had concluded plans to unfold the disbursement criteria of the funds to the vulnerable sector in Nigeria, which he said needed access to credit.
Presenting the award to Mr. Emefiele, the President and Chairman of Council, Chartered Institute of bankers of Nigeria (CIBN), Professor Segun Ajibola, commended him and his team at the CBN for their efforts at managing the Nigerian financial sector and intervening in critical sectors of the economy, particularly agriculture.