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Emefiele reiterates commitment to macroeconomic stability

Godwin Emefiele

. Says CBN disbursed N948bn to smallholder farmers to boost production  

Clara Nwachukwu

The Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, yesterday reiterated the apex bank’s commitment to ensuring macroeconomic stability.

This, he said, will help “to build a strong, stable and resilient economy that is self-sustaining and able to weather unanticipated shocks.”

Emefiele disclosed this in Ado-Ekiti while delivering the 25th and 26th combined convocation lecture of the Ekiti State University (EKSU), on Monday in Ado-Ekiti, Ekiti State.

He spoke on the topic: “The Role of Central Bank in Managing Economic Downturns,” to mark the 40th anniversary of the Institution.

Towards building economic resilience, Emefiele, represented by the Deputy Governor, Corporate Services, Edward Lametek Adamu, said the CBN engaged in a series of development finance interventions across sectors to propel growth.

To this end, he disclosed that the bank has disbursed about N948 billion to 4,478,381 smallholder farmers to upscale food production in Nigeria to avert hunger and shortages amid rising inflation.

He noted that different categories of Nigerians, particularly women and youth, had benefitted from various intervention programmes of the CBN such as the Anchor Borrowers’ Programme (ABP), Targeted Credit Facility, Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), and a host of others.

He said the intervention not only buoyed the Federal Government’s Green Revolution agenda by encouraging more Nigerians to take-up farming as a lucrative profession, but also generated about 12.5 million direct and indirect jobs for the youths to curb restiveness.

In particular, he argued that with an annual population growth rate of close to 2.8%, it was important that all efforts were made to ensure that employment opportunities became available for Nigerians, particularly in sectors that had the potential to absorb the youths.

Thus, it is undeniable that development finance interventions are frequently an integral part of the recovery strategy in most countries, although the degree and method could differ, depending on context as well as the nature and magnitude of shock.

Strengthening economic base

Despite criticisms, Emefiele, who argued that the CBN Act envisaged the role of development finance, which the Nigerian context demands, also noted that the intervention of central banks in development financing was not new, as it dated back to the 1920s.

To support his view, he cited instances of roles played by some central banks in more advanced economies in the financing of government programmes/projects in their early days.

According to the Governor, central banks in both advanced and emerging markets embraced quantitative easing to support their economies towards recovery from the global financial crisis of 2008/2009, and the associated economic downturn triggered by the COVID-19 pandemic.

Specifically, he recalled that many central banks in advanced, emerging and developing economies, during the recent COVID-19 supported their fiscal authorities to aid recovery of their economies following the significant decline in global growth occasioned by the pandemic.

Continuing, he said central banks, particularly in developing countries, intervened in the real economy to enhance the transmission mechanism of monetary policy actions, and facilitate the development of financial markets through the creation of easy access to credit for investment and production.

“Thus, it is undeniable that development finance interventions are frequently an integral part of the recovery strategy in most countries, although the degree and method could differ, depending on context as well as the nature and magnitude of shock,” he noted.

Sectorial Intervention

To combat the negative impact of the COVID-19 across sectors, Emefiele informed that the Bank allowed a one-year extension of the moratorium on principal repayments for CBN intervention facilities; reduced the interest rate on CBN intervention loans from 9 to 5%.

It also created the N300 billion Targeted Credit Facility (TCF) for affected households and small and medium enterprises through the NIRSAL Microfinance Bank.

He also cited the creation of a N100 billion intervention fund in loans to pharmaceutical companies and healthcare practitioners to expand and strengthen the capacity and to support the development of vaccines in Nigeria.

There was also the N1 trillion loans facility to boost local manufacturing and production across critical sectors; and the introduction of the Naira-for-Dollar policy to boost diaspora remittances to help manage economic downturns in Nigeria.

The CBN helmsman equally expressed satisfaction with the outcomes of these interventions, saying that measures in the agriculture and the manufacturing sectors played significant roles in ensuring that the Nigerian economy exited recession in the second quarter of 2017.

This came after five quarters of negative growth, as well as enabled further growth in 12 consecutive quarters following the recession.

“Our external reserves have risen from its low of $33 billion in March 2021, to over $40 billion today. In addition, our policy measures also led to a significant improvement in diaspora inflow from an average of US$6 million per week in March 2020, to an average of over US$100 million per week by January 2022,” he added.

With an annual population growth rate of close to 2.8%, it was important that all efforts were made to ensure that employment opportunities became available for Nigerians, particularly in sectors that had the potential to absorb the youths.

Training ground

In his remarks, the EKSU Vice-Chancellor, Prof. Edward Olanipekun, described the university as a reliable training ground for future leaders impacting life in the state.

Olanipekun assured that no effort would be spared to keep the flag flying, resolved to remain a good citadel of learning for Nigerians despite the challenges being experienced.

The Chairman of the occasion and Catholic Bishop of Ekiti Diocese, Most Rev. Felix Ajakaye, urged governments to be more pragmatic in the implementation of policies that will impact more on the citizens.

“Our thoughts and actions must be practical-oriented. We have to go beyond lectures, by being practical in dealing with policies that can benefit poor Nigerians,” he said.

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