What Nigeria Must Do To Reduce Hunger, Unemployment—Emefiele

The Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, has given some of the steps that must be taken by the government to reduce the level of hunger and unemployment in the country.

Emefiele, while delivering a keynote address at a dinner in Abuja, explained that investments in agriculture and related sectors, distribution storage systems, and necessary market infrastructure are critical to build a cost-effective, viable and sustainable food system in Africa.

Africa is blessed with vast human and natural resources. About 60 per cent of the world’s arable land is in Africa.

The continent is also home to 30 per cent of the world’s mineral reserves, eight per cent of the world’s natural gas and 12 per cent of the world’s oil reserves, 40 per cent of the world’s gold and up to 90 per cent of its chromium and platinum.

With a labour force of over 440 million, which is about 30 per cent of Africa’s total population of 1.3 billion people, experts have said that hunger and lack of jobs should not be serious issues in the continent.

Unfortunately, about 282 million people which is about 22 per cent of Africans are living with hunger according to the Food and Agriculture Organization of the United Nations, while 38 per cent or 494 million Africans are either unemployed or underemployed according to the International Labour Organization

The Governor told the audience that food security and job creation are fundamental building blocks in ensuring macro-economic stability, which is a cardinal mandate for central banks

He said that central banks and the financial system have critical roles to play in powering the solutions to the issues of food security and job creation on the African continent

With an annual population growth rate of close to 2.8 percent, Emefiele said it was important that all efforts are concentrated at ensuring that employment opportunities were available for Nigerians particularly in sectors that has the ability to absorb key key segments of the growing population.

Some of these sectors, according to him, are agriculture and manufacturing, which represented 10 and 27 per cent of Gross Domestic Product respectively.

Notwithstanding the relevance of these sectors, the apex bank boss said that sectoral credit allocation to them remained low relative to credit to the oil and gas sector, which stood at close to 29 per cent in 2014.

In contrast, he said that credit to the manufacturing and agricultural sectors stood at 10 per cent and three per cent respectively.

He said, “Given our population size of over 200 million people along with favourable youth demographics, we were aware that if the necessary support was provided to households and business such as improved access to finance, and better infrastructure these measures would boost productivity, and help in enabling greater direct investment flows into our economy.

“As a result, there was a growing recognition on the need to refine our monetary policy tools and regulatory framework in order to ensure that it was more responsive to the needs of the Nigerian populace.

“It was important that this new framework enabled the flow of credit by financial institutions to critical sectors in order to aid our efforts at driving productive activities and creating job opportunities for our growing population.

“More importantly, the design to curb an framework was excessive penchant for imports particularly in areas where we possessed the manpower and resources to produce such goods in Nigeria.”

The CBN Governor explained that the creation of the appropriate policy initiatives to address the identified challenges is a charge the apex bank had championed with some results.

He said the bank had also deployed some development initiatives aimed at increasing food production, creating job opportunities and diversifying the economy.

According to him, over N1trn ($2.5bn) had been earmarked to target key initiatives in the manufacturing, mining and agriculture, services sectors.

He added that over 80 per cent of this fund was targeted at the agric sector.

The Governor said that the bank has disbursed about $2bn of this fund to over three million farmers cultivating over 4.7 million hectares of arable land in the 36 states and the Federal Capital Territory under the Nigerian Anchors Borrowers Programme.

In addition, credit to the manufacturing sector has risen from 10 per cent in 2014 to 16 percent in 2021 and in the agriculture sector, credit has grown from 3 per cent in 2013 to 6 per cent in 2022.

“We recently revamped the management of the Nigerian Commodities Exchange, as a reposition NCX will help enable farmers enter long term contracts with agro processors and exporters.

“This measure would ultimately increase the flow of funds to support expansion of agriculture and agro processing activities in the country, which will create jobs and wealth for our people.

“We are hopeful that over the next two years credit to the agricultural sector would rise to over 10 percent,” he added.