100 for P-P-P: A fresh impetus to boost the economy

The Central Bank of Nigeria (CBN), since Mr. Godwin Emefiele assumed office has not shied away from the desire to make the Bank a catalyst for growth, job, and wealth creation. This, the Bank has aggressively pursued by providing access to affordable credit, boosting the capacity of MSMEs in priority sectors, such as agriculture, real sector and the services industry, thus conserving foreign reserves and creating lots of jobs in the process.

The Bank achieved these with the opening of intervention windows like Agriculture Credit Guarantee Scheme (ACGS) and Anchor Borrowers’ Programme (ABP), Agri-business, Small and Medium Enterprises Investment Scheme (AGSMEIS) in conjunction with the Bankers’ Committee, the Creative Industry Financing Initiative (CIFI), Export Facilitation Initiative (EFI), Non-oil Export Stimulation Facility (NESF). Determined to keep the economy on a sustainable growth path,  the CBN under its Commodity Development Initiative established Accelerated Agricultural Development Scheme aimed to engage about 10,000 youths per State in the Federation, including the Federal Capital Territory Administration in at least two agricultural commodities each State has comparative advantage. These facilities, the Bank made available at 9% singleinterest rate.

Others are Private Sector-led Accelerated Agriculture Development Scheme (P-AADS) established to complement AADS in exploring private sector partnership and facilitate the clearing of more lands for production of key agricultural products, particularly those it identified as the drain on foreign reserves: Rice, Wheat, Cocoa, Poultry, Soybean, Tomato, Cassava, Fish, Oil Palm, Livestock/Diary products, Cotton and Maize; the Textile Sector Intervention Facility (TSIF), including the Youth Entrepreneurship Development Programme (YEDP) established to improve access to finance by the youths to develop their entrepreneurial spirit using well-structured business model to stimulate job creation. These, and many more, were some of the efforts of the Bank in Emefiele’s Seven years at the CBN.

The result of his efforts was evident during the Coronavirus, COVID-19 pandemic, that exposed the weakness and vulnerability of Nigeria’s economy. The CBN was apparently the only visible government institution that came to the rescue of the nation. In quick succession the Bank rolled out Targeted Credit Facilities (TCF) for businesses and households affected by the virus, and the health sector received in grants andresearch support, as no nation was available to offer each other any support. Globally, every nation was busy fashioning programmes and policies to rescue their economies from the destructive virus.

Few weeks pass, the Bank at the Presidential Villa, Aso Rock, launched the digital currency, eNaira, the first nation in Africa to do so. But an obviously elated Godwin Emefiele, seized the opportunity to unveil a new financial intervention window as a gift to support companies and the economy. He unveiled the 100 for P-P-P initiative. According to the CBN Governor, the facility, Policy on Production and Productivity was established to empower 100 local companies in 100 days, and many hundreds in months ahead. This, he said, was to boost their production capacity, create wealth and stave off importation which has been responsible for foreign exchange crisis.

No doubt another effort by the CBN as catalyst for growth, that is determined to return the economy back to growth trajectory that was almost truncated by the pandemic. This, Godwin Emefiele said would boost the selected private sector entrepreneurs’ capacity after they would have been screened and selected(after submitting their applications) through a rigorous and competitive exercise in 100 days, starting from November 1, 2021. The exercise will be rolled over every 100 days to take in new set of 100 companies whose name would have been published in the national dailies in a transparent manner for the public to verify and confirm. He had said at the occasion, “After these 100 projects by companies in the first hundred days from November 1, we will take the next 100 companies/projects for another 100 days beginning February 1, 2022 and then another 100 companies for another 100 days beginning from May 1, 2022.”

Emefiele at the unveiling,said University and Polytechnic graduates willing to set up businesses can take advantage of the instrument as the Bank established the facility to reverse Nigeria’s over-reliance on imports. Stressing that the country cannot continue to waste its scarce reserves on cheap imports and currency speculators.

By implication, about 300 new entrepreneurs will have the rare privilege of accessing the much-needed finance to meet and achieve their operational aspirations and targets. The CBN Governor also assured that the financial instrument will be available at the banks for successful candidates to boost production and productivity, thereby transforming and jump-starting Nigeria’s economic base.Emefiele was hopeful that the projects willcatalyze sustainable employment-led economic growth through increased domestic production, emphasizing that the projects for consideration shall be new in existing companies requiring new machinery and other supports, and must have greatest potential to achieve significant scale in their in-country production and for domestic consumption and exports.

Continuing the CBN said the intervention instrument would be provided in local currency, the Naira, and complete foreign exchange  for the purchase of new machinery under its existing intervention processes, restating that the instrument will not cover refinancing of existing facilities and it will be subject to independent evaluation by international audit firms.

This fresh initiative as Governor Emefiele said at the launch,will be managed by the Bank’s Development Finance Department under his direct supervision, noting that the well-thought out initiative will be the best and most sustainable way to strengthen Naira exchange rate, insisting that the country has to look inward and produce what it eats, and eat what it produces.

Like many of the Bank’s existing laudable intervention instruments, this fresh initiative hopes to further give vent to the drive of the federal government to diversify the economy away from oil for sustenance, increase nationalrevenue base, reducing unemployment by creating jobs, thereby reversing over-reliance on imports and stress on the Naira.

It also behooves on the fiscal authority, especially those key ministries and agencies of the federal government saddled with the responsibility of running and keeping the economy on a path of growth come up with complementary policies and programmes just like the monetary authority, rather than seeing the CBN as a competitor or duplicator of the fiscal agencies’ mandate. The CBN, variously accused of chewing more than it can chew cannot also lay back when some of these agencies are either clueless or lack capacity to perform their constitutional mandate. It is also a caution to the CBN to be vigilant and ensure that this laudable  financial intervention is not hijacked by political predators who are always out with their fangs to corner every good policy for themselves and their cronies, otherwisethe set objective may turned out a mirage.

Ademola Oyetunji write from Abuja.