When the Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele was appointed to head the country’s apex bank, he, perhaps, did not grasp fully the challenges that would confront him. As such, with his vast experience in the banking sector, he would have assumed that his responsibilities were going to be limited to the conventional practice of most Central Banks which is, maintaining monetary, price and financial system stability.
However, few months on the job, Emefiele realized that the odds against the Nigerian economy were far beyond the stability of monetary system. He found out that unless he transcends the realm of monetary, price and financial system stability and undertakes developmental initiatives, with a view to spurring economic growth and job creation, his impact may not only go unfelt but even sabotaged.
Without much ado, the governor rolled up his sleeves and plunged himself into the task of bailing the economy out its gloomy outlook. In a recent address business and finance correspondents and editors, the Mr. Emefiele recalled some of his actions and the impact they have yielded on the economy. Essentially, he affirmed the bank’s interventions in the agriculture sector which have boosted the economy and created employments.
In the keynote address delivered on his behalf, by the CBN Deputy Governor, Corporate Services, Mr. Edward Lametek Adamu, on the theme; “Galvanizing Development Finance and Monetary Policy for Growth” Mr. Emefiele asserted that there is an evolving interconnectedness between development finance and monetary policy, not only in Nigeria, but in other economies across the world. He noted that the media also has a critical role to play in conveying a deeper understanding of the Bank’s commitment to the country’s economic growth and development, urging her to become advocates of the interventions by enlightening the public and other stakeholders.
“To put this keynote address in proper perspective, it is pertinent to note that at the Central Bank of Nigeria (CBN), our approach to stimulating economic development is three-pronged, centered on Agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure.
“You are no doubt aware that the Central Bank of Nigeria has transcended her core mandate of maintaining monetary, price and financial system stability, to undertake developmental initiatives with a view to spurring economic growth and job creation.
“Our efforts at these development finance initiatives have helped to accelerate the actualization of the Federal Government’s economic diversification programme. Diversifying our economic base presents a more sustainable and stable option.
“Given the foregoing, it is our conviction that focusing our developmental efforts on sectors with inherent potential for growth, employment and accretion to foreign reserves, would enhance the fortune of the Nigerian economy,” he said.
Mr. Emefiele also reeled out some of the achievements of the bank’s interventions; “though, we adopted unconventional or heterodox monetary policies, they were, however, well thought through and have been yielding significant gains for the Nigerian economy. Noticeably, is the GDP recovery in the third quarter of 2017 which has been sustained for nine successive quarters, after five consecutive quarters of negative growth.
“As you are aware, the CBN increased its lending to the agricultural and manufacturing sectors, through targeted intervention schemes such as the Anchor Borrowers’ Programme, Commercial Agricultural Credit Scheme and the Real Sector Support Facility. In particular, we sought to improve domestic supply of four commodities (rice, fish, sugar, and wheat), which consume about N1.3 trillion annually in our nation’s import bill.
“The Anchor Borrowers’ Programme (ABP) which was launched in November 2015, was designed to build partnerships between small holder farmers and reliable large-scale agro-processors, with a view to increasing agricultural output, while improving access to credit for farmers. Our targeted focus on the agricultural and manufacturing sectors was driven by the vast opportunities for growth in these sectors given our high population. These sectors have the ability to absorb the growing pool of eligible workers in our effort to meet local demand and save critical foreign reserves” he said.
The governor stressed on his monetary policy initiatives which navigated from the previous practice where special consideration was not given to critical sectors of the economy.
“This unconventional monetary policy initiatives have been premised on ensuring credit delivery to critical sectors of the economy. This has informed the directive to Deposit Money Banks to maintain a minimum Loan to Deposit Ratio (LDR) of 65% by the end of December 2019. The Bank is also creating the necessary eco-system to inculcate a better credit culture among Nigerians.
“In all, there is sufficient evidence of significant reductions in our annual imports bill, and increased non-oil exports. Our Development Finance interventions have helped to bolster agricultural production by removing obstacles faced by small holder farmers.
“We have also improved access to markets for farmers by facilitating greater partnership with agro-processors and industrial firms in the sourcing of raw materials. So far, the programme has supported more than 1.5m farmers across all the 36 States of Nigeria, in cultivating 16 different commodities over 1.4 million hectares of farmland. It has also supported the creation of over 2.5m jobs across the agricultural value chain.
“It is our game changing intervention in the rice value chain in Kebbi and other rice-producing states across the country that increased local rice production from 2.5 million tonnes in 2015 to 5.8 million tonnes in 2017 as well as cotton intervention with the flag-off of input distribution to 150,000 cotton farmers, cultivating 150,000 hectares in 23 States of the Federation. Currently the cotton planted by these farmers has begun fruiting, while some are ready for harvest and off-take.
“We are currently also paying additional attention to cassava because the commodity has many different uses along the value chain. The value chain has enormous potential for employing over 2 million people in Nigeria,” the governor assured”.