When Godwin Emefiele assumed office as the tenth indigenous Governor of the Central Bank of Nigeria (CBN) on June 3, 2014, there was a 60 per cent decline in the price of crude oil and geo-political tensions had risen. Also, there were widespread uncertainties along critical global trading routes and the normalisation of monetary policy by the United States’ Federal Reserve System led to acute capital flow reversals, especially in emerging markets such as Nigeria.
The impact of these on the Nigerian economy was quite severe, cumulatively plunging the economy into a recession, for the first time in a quarter of a century. The media space was suffused with news about the depletion of the country’s foreign reserves and the depreciation of the Naira.
The tough period called for bold and positive decisions to be taken and the CBN, led by Emefiele, stood up to be counted.
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Unveiling his vision for the CBN at his maiden world press conference, on June 5, 2014, Emefiele, in a 10-point agenda, passionately shared his ideas on creating a central bank that is professional, apolitical, and people-focused.
Emefiele expressed the desire to lead when he said he wanted to oversee a “Central bank that spends its energies on building a resilient financial system that can serve the growth and development needs of our beloved country, Nigeria.”
Given his pedigree, Emefiele was expected to bring on board critical reforms at the Bank and he wasted no time in doing so. While building on the policies of his predecessors, the core of Emefiele’s innovative stance at the CBN was development financing.
To him, the CBN was to act as a financial catalyst by targeting strategic sectors that could create jobs on a mass scale and reduce the country’s import bills. He declared that by deploying developmental initiatives to create an enabling appropriate incentives to empower innovative entrepreneurs to drive growth and development in the Nigerian economy.
The Bank, since Emefiele assumed office in 2014, initiated the Anchor Borrowers’ Programme (ABP) launched by President Muhammadu Buhari in November 2015 which has triggered a revolution in the value chains of selected crops, especially rice.
This novel development finance intervention scheme ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighboring countries.
Indeed, Emefiele who survived all the darts thrown at him when the present government took over in 2015, is faced with a similar situation today, as persons who might be eyeing his position in the incoming administration are doing everything possible to put him down, despite the reforms he had championed at the CBN.
All they want is for members of the public to focus on the challenges associated with the recent naira redesign policy which some persons attempting to politicise, ignoring the tremendous impact of the intervention programme implemented by the CBN Governor.
Some of these intervention programmes are the Anchor Borrowers Programme aimed at boosting agricultural production, create jobs, and reduce food import bill; Commercial Agriculture Credit Scheme which is to provide finance for the country’s agricultural value chain; Real Sector Facility to support large enterprises for startups and expansion financing needs; and the 100 for 100 on Production and Productivity Policy which was designed to create the flow of finance and investments to enterprises.
There is also the Health Sector Intervention Facility to stimulate economic activities locally within the healthcare sector; Targeted Credit Facility as a stimulus package to support households and firms to mitigate the negative impact of Covid-19; the Nigeria Bulk Electricity Trading Partner Assurance Facility and the Nigerian Electricity Market Stabilization Fund aimed at supporting the power sector.
Let’s start with the Anchor Borrowers Programme. A key focus of the administration of President Muhammadu Buhari has been the deployment of mechanisms to ensure that agriculture thrives in Nigeria.
Infact, one of the key elements of the Federal Government’s Economic Recovery and Growth Plan (ERGP) is to significantly grow the economy and achieve maximum welfare for the citizens by ensuring food and energy security.
Guaranteeing food security means ensuring availability and access across all demographics in the country. The current administration has leveraged innovation and mechanization in the agricultural sector by supporting the production of numerous commodities in which the country has comparative advantage, thereby guaranteeing the availability of these commodities to the masses.
Experts have said that food security cannot be attained if farmers are not encouraged and adequately equipped with access to the best inputs and opportunities to learn effective agronomic practices for improved yield. It is in line with this that the Federal Government has embarked on several initiatives to provide farmers with resources, input, and materials to cultivate.
It is for this reason that the CBN led by Emefiele is supporting the efforts of the Federal Government by providing affordable and accessible financing options to drive domestic food production.
Under the ABP, the CBN had released the sum of N1.079trn, as of February 28, 2023, of which N0.96trn was due for repayment.
Under Emefiele, the CBN ABP had supported about 4.57 million smallholder farmers at end-February, 2023, who cultivated over 6.02 million hectares of 21 commodities across the country.
The commodities which benefitted from the fund are rice, wheat, cowpea, millet, maize, cotton, fish, soya bean, poultry, cassava, groundnut, ginger, sorghum, oil palm, cocoa, sesame, tomato, castor seed, yellow pepper, onions, and cattle/dairy.
The intervention has also contributed significantly to the increased national output of focal commodities, with maize and rice peaking at 12.2 and 9.0 million metric tonnes in 2021 and 2022, respectively.
The programme has also helped to improve the national average yield per hectare of these commodities, with productivity per hectare almost doubling within the eight years of it’s implementation.
The CBN’s interventions, with the core objective of catalysing the economy’s productive base, have continued to support investments in capital assets in sectors with high-growth and employment-elastic potential.
Emefiele had said that the Central Bank under his leadership remains committed to its developmental mandate of stimulating access to finance for the real sector, particularly agriculture, as it continues to support the Federal Government’s drive for food security and economic growth.
The CBN Act of 2007 charges the apex bank with the overall control and administration of monetary policy. The four key objectives of the CBN includes to ensure monetary and price stability; issue legal tender currency in Nigeria; maintain external reserves to safeguard the international value of the legal tender currency; promote a sound financial system in Nigeria; and act as banker and provide economic and financial advice to the federal government. The central bank under Emefiele has continued to perform major developmental functions, focused on all the key sectors of the economy.
The recent drive for cashless by the CBN which was followed by the redesigning of the naira was faced with some opposition because it was perceived to be targeted at some politicians. This, Emefiele had explained was not true, maintaining that the central bank was purely focused on its mandate.
Undoubtedly, the benefits of going cash-less are numerous and remain the best option for any country as has been seen globally. For instance, if Nigeria must address the current gale of insecurity, corruption and economic sabotage among other actions of some privileged elites who continued to take advantage of a dysfunctional system to short-changed the country, it must evolve to a cashless society.
It is also necessary in the fight against inflation in Nigeria, which has stubbornly remained at double-digits. Also, the cash-less policy has led to a reduction in banditry and kidnappings which were rampant in the recent past.
With the cashless policy, people can easily pay their bills online, shop and schedule transactions and manage all the finances using their laptops or smartphones.
Going cashless not only eases one’s life but also helps authenticate and formalise the transactions that are done. This helps to curb corruption and the flow of black money which results in an increase of economic growth. Also, the cost of printing and transportation of notes would be reduced.
But just like the Minister of Labour and Employment, Chris Ngige aptly noted, implementation of such a policy comes with challenges and resistance.
The cash crunch is part of the cashless policy. It was the implementation that ran into a hiccup, it was not smooth; so the CBN had taken steps to smoothen it out.
Ngige had said, “They said it was about N3 trillion and they want to cut it down. Cutting it down is part of that cashless policy. Some of us that travel abroad, when you bring out cash, people would be staring at you as if you are coming from Mars, because they are not used to people bringing out cash.
“If you are bringing out huge cash abroad, you are either a drug peddler or you are not doing clean business. In fact, they regard anybody bringing out cash as somebody doing money laundering. Since the cashless policy commenced, there have been temporary relieve we have gotten from banditry, from kidnapping and people asking for N50 million cash to release kidnapped victims.
“All those have abated. So, it is not a bad policy. It is the implementation; it should be done gradually. There is no way we would go back to the old way, where people carry N100 million cash and bring it into the market. Cash should be for low volume and low value transactions.”
The Minister noted that vote-buying reduced drastically during the 2023 general election because there wasn’t cash to induce voters.
In addition, measures such as an extension of the moratorium on the apex bank’s interventions programmes, interest rate reduction, creation of a N100bn targeted credit facility; N100bn health sector intervention facility and N1trn for the manufacturing sector, strengthening the central bank’s Loan to Deposit Ratio (LDR) policy and regulatory forbearance, were all introduced by Emefiele to save the economy.
Emefiele was also instrumental to the formation of the private-sector-led Coalition Against COVID-19 (CACOVID), which was able to mobilise billions of naira and has immensely supported the country’s COVID-19 fight by setting up healthcare facilities across the country as well as in distributing palliatives to states.
Also, as part of efforts to stimulate infrastructural development across the country, the Emefiele-led CBN, working with the fiscal authorities also established a N15 trillion infrastructure development company (Infraco).
Emefiele’s commitment to the developmental mandate of the CBN needed to be supported to boost more confidence and trust in Nigeria’s economy.
– Onuba, a Chartered Accountant writes from Abuja.
Disclaimer: This article is entirely the opinion of the writer and does not represent the views of The Whistler