Governor of the Central Bank of Nigeria, Godwin Emefiele, apparently, is not relenting on stimulating growth in Africa’s largest economy as he continues in the path of using the instrument of development financing to move the economy forward.Recently in Abuja, the Chief banker of the nation, partnered with seven commercial banks to inject a sum of N23.2billion into 28 companies drawn from manufacturing, agriculture and health sectors of the economy to boost production and productivity as it launched its newest initiative christened the ‘100 for 100 policy on production and productivity’ BAMIDELE FAMOOFO reports.
A review of the performance of the Central Bank of Nigeria’s intervention programmes which are targeted at stimulating productivity in manufacturing/industries, agriculture, energy/infrastructure, healthcare and Micro, Small and Medium Enterprises showed that the Bank has injected over N3.09trillion into the economy since Godwin Emefiele, CBN Governor, started his administration.
Estimated figures show that the bulk of the fund was disbursed to beneficiaries in the Real Sector of the economy under the Real Sector Support Facility programme which the Bank said had gulped N1.4trillion cumulatively as at end of December 2021.
The Anchor Borrowers’ Programme, according to a report from the Bank had also received about N927.94billion while Targeted Credit Facility which focused on bailing the economy out of recession in the aftermath of the Covid-19 pandemic attracted about N369.48billion while the Power Sector interventions got about N384.94billion as at December 31, 2021 among other interventions.
“Estimated figures show that the bulk of the fund was disbursed to beneficiaries in the Real Sector of the economy under the Real Sector Support Facility programme which the Bank said had gulped N1.4trillion cumulatively as at end of December 2021
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The latest of all the interventions is the 100 for 100 Policy on Production and Productivity, which was introduced to stimulate the flow of finance and investments to enterprises and projects with potential to kick-start a sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity.
Emefiele, during the launch of the programme in January, in Abuja, said the Bank has received 224 applications, valued at N294.91 billion for real sector projects in agriculture, energy, healthcare, manufacturing and services.
“The applications are currently being processed and the first batch of beneficiaries under the intervention will be announced on 31st January 2022, with their names published in national dailies. These projects have been carefully selected in line with the approved selection criteria as contained in the guidelines,” he said.
At the launch of the new intervention programme, Emefiele, made a presentation of commemorative cheques worth N23.2billion to 28 beneficiaries, through seven Participating Financial Institutions.
Presenting the cheques to the beneficiaries, which comprised 14 companies in the manufacturing sector, 12 in the agricultural sector, and two in the healthcare sector, at the Bank’s head office, Emefiele disclosed that the 100 for 100 PPP was designed by the CBN to stimulate investments in Nigeria’s priority sectors with the core objective of boosting production and productivity.
He added that these will aid Nigeria’s efforts to stimulate greater growth of the economy and create employment opportunities.
According to him, the formal launch of the 100 for 100 policy for the scheme’s developmental component underscored the critical roles in building new blocks for economic growth, improving production expansion, reducing reliance on imports and fostering growth on non-oil export, particularly as the country’s national growth was highly dependent on a strong and competitive businesses.
He explained that, “under the initiative, every hundred days, manufacturers in critical sectors that seek to engage in greenfield projects or in expanding their existing facilities will have access to cheaper forms of credit at single digit rates, as well as foreign exchange to procure plants and machineries.”
While noting that the programme had the potential to significantly accelerate manufacturing output, promote further diversification of the economy and enable faster growth of Nigeria’s non-oil exports, Emefiele expressed confidence that the PPP will help to reduce the country’s over-reliance on imports, and stimulate productivity in agriculture, healthcare, manufacturing, extractive industries, logistics services, trade-related infrastructure, and renewable energy.
Specifically, he said the scheme aimed at creating more than 20,000 jobs and expected to generate over $125.80 million in foreign exchange earnings.
Speaking further, he explained that only 79 out of an initial 243 applications valued at N321.06 billion spread across key sectors of the economy, were submitted by the banks, out of which only 28 companies with projects that had clearly articulated proposals were eventually selected for funding valued at N23.20 billion.
Also speaking at the launch, the Minister of Labour and Employment, Chris Ngige lauded the CBN Governor for what he described as laudable initiatives, which he said aligned with the Federal Government’s goal of creating jobs and lifting people out of poverty.
While noting that the Nigerian economy was yet to be fully diversified, Ngige sued for greater collaboration between the fiscal and monetary authorities, noting that such partnership was vital to ensuring economic growth.
“The latest of all the interventions is the 100 for 100 Policy on Production and Productivity, which was introduced to stimulate the flow of finance and investments to enterprises and projects with potential to kick-start a sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity
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Speaking on behalf of the Secretary to the Government of the Federation, Boss Mustapha, the Permanent Secretary, Ecological Fund Office, Habiba Lawal said the ingenious initiative was coming at a time the country was exploring means of economic diversification aimed at reversing its overdependence on importation as well as galvanizing local production of goods and services that would trigger employment generation, wealth creation and poverty eradication.
In their separate remarks, the President, Manufacturers Association of Nigeria, Mansur Ahmed and the Managing Director, Access Bank Plc, Dr. Herbert Wigwe, who doubles as the Chairman, Body of Bank Chief Executive Officers, commended the initiative and pledged their readiness to collaborate with the CBN to ensure its success.
Highpoint of the ceremony was the presentation of symbolic cheques to the beneficiaries, through seven Participating Financial Institutions – FCMB, Fidelity, Keystone, Stanbic IBTC, Union Bank, Wema Bank and Zenith Bank.
Other interventions
The Monetary Policy Committee in January, during its inaugural meeting in 2022 reviewed the performance of the Bank’s intervention programmes aimed at stimulating productivity in manufacturing/industries, agriculture, energy/infrastructure, healthcare and Micro, Small and Medium Enterprises.
Between November and December 2021, noting that under the Anchor Borrowers’ Programme, the Bank disbursed N75.99 billion to support the cultivation of over 383,000 hectares of maize, rice and wheat during the 2022 dry season, bringing the cumulative disbursements under the Programme to N927.94billion to over 4.5 million smallholder farmers cultivating 21 commodities across the country.
All excess output aggregated from the financed farmers will be released to the Nigeria Commodity Exchange to help moderate the prices of food in the market. The Bank also released N1.76 billion to finance two large-scale agricultural projects under the Commercial Agriculture Credit Scheme.
In addition, the Bank disbursed the sum of N151.23 billion under the Real Sector Facility to 15 additional projects in agriculture, manufacturing, mining, and services. The funds were utilized for both greenfield and brownfield (expansion) projects under the Covid-19 Intervention for the Manufacturing Sector (CIMS) and the Real Sector Support Facility from Differentiated Cash Reserve Requirement.
Cumulative disbursements under the Real Sector
Facility currently stood at N1.40 trillion disbursed to 331 projects across the country. As part of its effort to support the resilience of the healthcare sector, the Bank also disbursed N498.00 million to two healthcare projects under the Healthcare Sector Intervention Facility, bringing the cumulative disbursements to N108.85 billion for 118 projects, comprising of 31 pharmaceuticals, 82 hospital and 4 other services.
To support households and businesses affected by Covid-19, the Bank disbursed N20.29 billion to 40,521 beneficiaries, comprising 35,340 households and 5,181 small businesses under the Targeted Credit Facility (TCF) within the period.
The cumulative disbursements under the TCF stood at N369.78 billion to 777,666 beneficiaries, comprising 648,052 households and 129,614 small businesses. To further promote entrepreneurship development among Nigerian youths, the Bank disbursed N293 million to 59 beneficiaries under the recently introduced Tertiary Institutions Entrepreneurship Scheme.
Under the National Mass Metering Programme, the sum of N47.83 billion was disbursed for the procurement and installation of 858,026 electricity meters across the country under the Scheme’s Phase-0.
The Committee also noted the improved collections by DisCos as a result of increased meter installations. The Bank released N274.33 billion to power sector players, as part of its effort to support the sector under the Nigeria Bulk Electricity Trading Payment Assurance Facility. This was in addition to the N20.58 billion released to Distribution Companies under the Nigeria Electricity Market Stabilisation Facility – Phase 2 (NEMSF-2).
To further support the development of enabling infrastructure in the gas industry, the Bank released additional N3.00 billion for the augmentation of an existing infrastructure, bringing the cumulative disbursements under the Intervention Facility for National Gas Expansion Programme to N42.20 billion for six projects.
Outlook
The outlook for the intervention programmes of the Emefiele administration is sustainable as all members of the MPC believe it is the right thing to do. A communiqué issued after the meeting indicated that the decision to hold all the monetary policy parameters was to ensure that the CBN continues to encourage economic growth through its development financing programmes.
“After a careful balancing of the benefits and downsides of each policy option, the MPC decided to hold all policy parameters constant; believing that a hold stance will enable the continued permeation of current policy measures in supporting the recorded growth recovery and further boost production and productivity, which would ultimately rein-in inflation in the short to medium term,” MPC concluded.
