The Central Bank of Nigeria has defended a recent donation of N100bn worth of fertilizer which suggests that the Governor, Olayemi Cardoso is toeing the line of his predecessor, Godwin Emefiele who adopted an unorthodox monetary policy style.
Last week, Cardoso donated 2.15 million bags of various blends of 50kg fertilizers to Nigerian farmers through the Federal Ministry of Agriculture and Food Security.
The fertilizer is valued at over N100bn at current market prices, according to estimates.
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The donation was largely criticised by economists who believe that Cardoso had returned the CBN to the old ways where the apex bank directly intervened in development financing.
But in defence of the donation, the CBN in an article titled, ‘Partnership to Tackle Food Inflation: Fertilizer Donation’, denied either initiating a new intervention or involving itself in development finance interventions.
CBN said, “No, the Central Bank of Nigeria has not initiated any new intervention but has rather donated fertilizers from the remnants of its stock, which were blended under its previous interventions in the agricultural sector. These fertilizers are now being donated to farmers across the country through the Federal Ministry of Agriculture and Food Security.
“This decision is aimed at supporting domestic agricultural production rather than allowing the fertilizers to remain unused and go to waste. We anticipate that the fertilizers will ultimately support our overall objective of price stability which is being challenged by rising food inflation.”
Since Cardoso took over the affairs of the bank, he has on several occasions criticised Emefiele for abandoning the bank’s core mandate of monetary and price stability.
“The interventions that took place in the recent past were estimated in excess of N10 trillion. I’m not talking about ways or means. What was the budget of the federal government of Nigeria? What was the budget of the largest states in Nigeria? Do the maths and it would tell you the extent of damage too much of what may appear to be good things can do to an economy.
“So, for me, it’s a major issue. A number of things will be naive to say. We’re not going to get directly involved in interventions, those that are out there, they need to be properly monitored to ensure they come back in,” Cardoso said at the February Monetary Policy Meeting.
Despite the recent intervention, the bank is insisting that it has pulled back on direct development intervention.
However, the bank admitted that it would support relevant organisations that possess the expertise and capacity to intervene directly.
CBN noted, “As stated by the Governor of the Central Bank of Nigeria on several occasions, the CBN is realigning its focus towards its core mandate of ensuring monetary and price stability, thus stopping its direct involvement in development finance interventions. The CBN will, however, support relevant organisations that possess the expertise and capacity to intervene directly.
“Consequently, the CBN made the decision to donate the fertilizers to Nigerian farmers through the Federal Ministry of Agriculture and Food Security, which possesses the institutional knowledge and infrastructure to effectively distribute the fertilizers to the last mile. This partnership was aimed at supporting the Federal Ministry of Agriculture and Food Security efforts to enhance food productivity and security, ultimately curbing food inflation and reinforcing the CBN’s pursuit of price stability.”