In addition to its main function of formulating and monitoring the implementing of monetary and fiscal policies, the Central Bank of Nigeria (CBN), under the present Governor, Mr Godwin Emefiele, has expanded its scope to include the facilitation of critical sectors of the economy. The objective is to incentivise them to play their role in building the nation more effectively.
This Intervention Fund policy thrust became more pertinent as the fortunes of the country hitherto hinged on a monoculture- crude oil – began to dwindle and the need to diversify the economy becomes increasingly urgent. In deciding to play a leading role in this effort to redirect the economy towards renewable and sustainable sources of revenue such as the real sector and agriculture, the CBN is building a platform that has incremental benefit on a long term basis.
So far, the apex bank’s commitment under such well-articulated instrument types runs into billions of Naira under various schemes. The impact of that policy is beginning to be felt with the injection of N200 billion into the Commercial Agricultural Credit Schemes which has deepened rice production through the Anchor Borrowers’ Fund designed to lift small holder farmers and transform them into big time agro-businesses. With this intervention, rice production has received a big boost that may well expand into meeting the nation’s local demand in the foreseeable future.
Similarly, the Power and Aviation Intervention Fund of N300 billion, Micro Small Medium Enterprise Development Fund of N220 billion as well as the Real Sector Support Facility totalling about N300 billion are intended to enhance the country’s manufacturing capability in terms of employment generation and other additions to the Gross Domestic Product (GDP). The Nigeria Electricity Market Stabilisation Facility put at N213 billion, though a revolving credit facility totalling N1.233 trillion, is part of the CBN’s package aimed at putting the nation back on track as it aspires to be among the 20 largest economies in the world. The apex bank did not leave out the media and the solid minerals’ sectors out in this plan to build a more reliable base for the nation as it emerges as the largest economy on the African continent.
Like most laudable plans, this ambitious intervention policy that is widening the potentials of the Nigerian state in a manner that will propel its growth and development, is not without its challenges one of which is the CBN’s insistence on disbursing the monies through the Deposit Money Banks (DMBs).In spite of the apex bank’s guarantees, these DMBs seem not too willing to cooperate and key in to the aspirations of the CBN in this task of building an economy that will be the pride of all Nigerians.
It is in this regard that we suggest that the apex bank consider the option of disbursing these funds directly to the sectors, particularly the real sector, that desperately need the facility. This, in our view, may entail borrowing a leaf from the Development Finance Institutions (DFIs) that deal directly with the sectors they are promoting. The excessive profit motive of the DMBs is, in our considered opinion, a cog in the wheel of the CBN achieving its laudable goal of revving up the nation’s engine of growth.
As we commend the apex bank on this policy, it is imperative that all obstacles on the way to its full realisation are extirpated.
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