…Outlines relevance of digital economy
By Kayode Tokede
The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has said that it has raised the COVID-19 targeted facility for Small, and Medium Enterprises (SMEs) and households from N150billion to N300billion to enable more Nigerians to benefit.
The CBN made this disclosure on Saturday at the 30th seminar for Finance Correspondents and Editors which held virtually.
It is the third raise in the facility since the start of the COVID-19 lockdown.
“The CBN has equally made bold moves to alleviate the plight of households and business owners and drive economic growth during the pandemic,” said CBN governor.
“We created a N150 billion Targeted Credit Facility (TCF) for affected households and small and medium enterprises through the NIRSAL Microfinance Bank.
“Already, N149.21 billion has been disbursed to 316,869 beneficiaries.
“Given the resounding success of this program and its positive impact on output growth, we have decided to double this fund to about N300 billion, to accommodate many more beneficiaries and boost consumer expenditure which should positively stimulate the economy,” he said.
Recall at the wake of the COVID-19 lockdown and the attendant impact on households and SMEs, the CBN introduced N50bn targeted credit facility at single digit interest rate and three years moratorium to cushion the impact of the COVID-19 lockdown.
The programme was hugely subscribed and the CBN had raised the funds to N100bn and later N150billion. But because the interest kept rising, the CBN has further raised it to N300bn.
Represented at the event by the CBN Deputy Governor, Corporate Services, Mr Edward Lamekek Adamu, the CBN governor also said the time is now to leverage the digital space to drive economic growth.
“We must find ways to leverage digital channels in improving access to finance and access to credit for all Nigerians. Consequently, the digital economy will be a key factor in our efforts at driving growth over the next few years. As we are all aware, the digital economy is made up of various components, including data analytics, robotics, Artificial Intelligence (AI), machine learning, e-commerce, e-business, e- infrastructure. It is based on the interconnectedness of people, organizations, and machines that results from the Internet, mobile technology and the Internet of things,” he explained.
According to him, “To further drive growth, Nigeria needs to build a solid digital economy, by focusing on digital infrastructure (internet connectivity most importantly), digital literacy and skills, digital financial services, digital platforms and digital entrepreneurship 4 Classified as Confidential and innovation. As the biggest economy in Africa with one of the largest youth populations in the world, Nigeria is well-positioned to develop a strong digital economy.”
“Consequently, there is a need to focus on accelerating improvements across five fundamental pillars of a digital economy: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship and digital skills” he further stated.
He reiterated the need to build a lasting digital economy for businesses to guarantee economic prosperity.
He noted that the information, communication and technology (ICT) sector was critical in mitigating the COVID-19 pandemic economic impacts on Nigeria’s gross domestic (GDP) growth in 2020 as it grew by 14.7 per cent in 2020 relative to the growth of 10.16 per cent in 2019.
Emefiele said Nigeria needs to focus on digital infrastructure (especially internet connectivity); digital literacy and skills; digital financial services; digital platforms; digital entrepreneurship and innovation for building a solid digital economy.
“As the pace of technological adoption increases, we must find ways to leverage digital channels in improving access to finance and access to credit for all Nigerians,” he said.
“Consequently, the digital economy will be a key factor in our efforts at driving growth over the next few years.
“As the biggest economy in Africa with one of the largest youth populations in the world, Nigeria is well-positioned to develop a strong digital economy.
“Consequently, there is a need to focus on accelerating improvements across five fundamental pillars of a digital economy: digital infrastructure, digital platforms, digital financial services, digital entrepreneurship and digital skills.”
Emefiele reiterated that CBN’s restrictions on cryptocurrency transactions were necessary to protect the financial system and the generality of Nigerians from the risks of the digital currency as it has had consequences on financial stability and implementation of monetary policy.
He further encouraged Nigerians to embrace the use of blockchain technology despite the crypto ban.
“However, our policy stand does not preclude Nigerians from harnessing the benefits of the underlying technology that support crypto transactions, which is a distributed ledger, commonly referred to as the blockchain.
“There are several examples where blockchain technology has been used to facilitate and improve transparency in the settlement of trade transactions.
“Our regulatory sandbox is available for the fintech companies to explore the use of blockchain technology in areas that would be beneficial to the Nigerian economy.”