The importance of entrepreneurship globally as the engine of any economy underscores the emphasis the developed economies attach to it and this is why entrepreneurial activities have been found to be capable of making positive impacts on the quality of life and economy. Thus, a developing economy like Nigeria cannot afford not to leverage on and develop this sub-sector for its economic prosperity.
Prior to the petro-dollar (oil boom) era of the 1970s, the Nigerian economy was basically agricultural based. The agriculture sector in fact contributed 65 percent to the Gross Domestic Product (GDP) and represented 70 percent of the total exports. The sector was marked with high labour-absorptive ratio and provided the scarce foreign exchange needed for the importation of raw materials, machine spare-parts and other capital goods required for few available industries. This was suddenly abandoned with the growing ‘importance’ of oil, and agriculture was sidelined to the extent that Nigeria could hardly feed her population again from her ailing agricultural activities. The petro-dollar years also brought other challenges which we are still living with today – dwindling foreign reserves owing to huge importation bills, taste for foreign goods and services and loss of value for those things we once cherished and valued which invariably affected the Naira exchange value.
The situation described above were also noted when Mr. Godwin Emefiele, the Central Bank Governor, assumed office about five years ago. At the time he was appointed, the economy was ailing, and shortly after he warned and advised the nation to change the ways we were doing things, otherwise the economy might go into recession. He was right about his prediction. That foresightedness may have signaled his preparedness for the task ahead. No wonder, he pledged to spend his energies to bequeath to Nigerians a strong and resilient financial system that will serve the growth and development needs of the country. He promised to use development bank strategies as his fulcrum to drive the economy.
As consequences, and the effect of the global collapse of commodity prices experienced in 2014 through 2016, and the crash of crude oil prices to as low as $27per barrel, Nigeria entered into recession. The CBN under the watch of Godwin Emefiele may have thought it wise for us to look inwards and help ourselves;a mission considered by skeptics as wasteful. However, to pursue this vision, he reinforced some intervention development windows of the Bank, such as: the Agricultural Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme (CACS), N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), Small and Medium Enterprises Credit Guarantee Scheme (SMECGS), and the very revolutionary of any of the intervention policies of the Bank, Anchor Borrowers’ Programme (ABP). Withjust three years of the programme, it has had over 900, 000 rice farmers benefiting from the initiative as at December 2018. It has also crashed the importation of foreign rice into the country from the Asian countries and others.
Emefiele’s surprise move of suspending 41 items (now 42 with the inclusion of fertilizer) from the official inter-bank forex window shocked many, particularly those benefitting from importation of those goods. He was heckled. He was called names. They also called for his sack. Emefiele remained unperturbed and stuck to his decision. His unwavering and ‘stubborn’ disposition in discharging his duties was the pivot that arrested the hemorrhage in the nation’s reserves and the exchange rate has been stablefor almost 2 years now.
To also return Nigeria back to its glorious economic days, the Emefiele led-CBN rallied round the managers of deposit money banks on a mission to support and revive the Micro, Small and Medium Enterprises (MSMEs) whose bane had been access to credit. Andon February 9, 2017, during the 331st Bankers’ Meeting, the members approved Agric-Business/Small and Medium Enterprises Investment Scheme (AGSMIES) to support the Federal Government’s efforts at promoting agriculture and diversify the economy, and at the same time set the economy on the path sustainable growth to engender employment.
As a commitment to the successful implementation of the scheme, the deposit money banks on their own volition pledged to set aside 5 percent of their profit- after- tax annually to finance any eligible project under the scheme. And has it was projected the contribution would have amounted to about N90 billion by last December 2018.
It must be noted that the CBN over the years has always underscored its determination to support the strategic sectors in order to ensure a strong currency brought about by an active and productive real sector. However, Nigerians have not been taking full advantage of these opportunities, particularly, the informal sector which indeed needs this fund. For instance, of the N210 billion MSMEs intervention fund, only N100 billion have so far been disbursed. At the 10th Annual Bankers’ Committee Retreat in December 2018, Emefiele was quoted to have lamented that the regulator and the Bankers Committee were “not happy with the level of disbursement of the several interventions”. There is also the N500 billion Export Expansion Grant (EEG) window opened to facilitate export but Nigerian business men/women are yet to fully tap into it.
Analysts and stakeholders have commended the CBN and the Bankers’ Committee for the AGSMEIS window which they said will further encourage and support people in farming, trading, artisans and generally, the informal sector operators, including the creative industry – entertainers, musicians, actors and movie makers.
The Director General of National Directorate of Employment (NDE), Dr. NasiruLadan-Argungu has also lent his support to AGSMEIS. He hopes that about 185, 000 young applicants on the Directorate’s scheme who will be beneficiaries are those into cosmetology products production, fashion designing, farming, electricians and computer operators, among others, nationwide.
These funds are available and purposely to check the issues of lack of access to cheap and affordable credit needed to galvanize industrialization and create jobs, but people are not tapping into them due to inadequate information.
Nevertheless, the CBN has never ceased to communicate, enlighten, educate and promote its programmes and activities as support to the efforts of the Federal Government in its economic diversification agenda. The CBN Governor even came out with a philosophy at a time which he called PAVE, an acronym for ‘Produce, Add Value and Export’, admonishing Nigerians to return to the farm, produce and buy what isproduced in Nigeria’ as a more sustainable way to ensure economic stability and minimize dependence on oil.
What is urgently required as complimentary handshake by Nigerians is to support the CBN and make use of these windows, while the fiscal authority is urged to come up with policies to ensure a more enduring and sustainable economic management, since monetary policy alone is not enough to sustain macroeconomic development for a long period of time.
Tochukwu Adindu is a resident of Nsukka.