Prequalification of businesses for the Central Bank of Nigeria (CBN’s), 100 for 100 PPP — Policy on Production and Productivity’, will be based on contributions to economic growth, job creation, and social impact, the apex bank has said.
It added that selecting the companies will be evidence-based, transparent and measurable.
These are contained in a document stipulating the criteria for private sector companies’ participation in the new financial instrument released and signed by the Director, Development Finance, CBN, Yusuf Yila Philip, CBN, on Sunday.
Recall that at the launch of the Central Bank Digital Currency (CBDC) also called eNaira, CBN Governor, Godwin Emefiele, had said under the new policy, the apex bank would advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, beginning from November 1st.
The CBN said these measures are to ensure the operational framework for a robust and transparent process for identifying and selecting high-impact companies and projects under its 100 for 100 PPP.
“These are projects that must catalyse sustainable employment-led economic growth through increased domestic production and productivity in the near term,” the document reads.
Other criteria for participation include new projects, proper book-keeping, and publication of interventions.
Specifically, to be considered are new projects in existing companies requiring new machinery and other support, which must have the greatest potential to achieve significant scale in their in-country production and for domestic consumption and exports.
CBN explained that the broad objective of The 100 for 100 PPP, is to reverse Nigeria’s over-reliance on imports, by creating a platform that targets and supports the right companies and projects with the potential to immediately transform and jumpstart the productive base of the economy.
The instrument will therefore provide naira intervention funding under existing CBN intervention processes and complete foreign exchange funding for new machinery.
Intervention in such projects would depend on production efficiency and scalability; local content capacity; job creation and human capital development and contribution to economic growth.
“This instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to an independent evaluation by international audit firms,” the document said.
It added that all interventions under this project will be made public and published in national dailies.
This instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to an independent evaluation by international audit firms.
Audited Financial Report
CBN also listed historical financial performance — three years of the audited report of the company, viability of the business and creditworthiness of directors among the requirements to be considered.
The Bank insists that 80% of jobs created by such projects must be for Nigerians, while 50% of raw materials for the project must be sourced locally.
Additionally, the projects must have an impact on key macroeconomic indicators and global export earning potential, with contribution to gross domestic product (GDP) potential, the share of the domestic market, foreign exchange earning potential, and ease of exports.
Under its rating, it said a highly satisfactory project should meet stipulated requirements by 81 to 100%; a satisfactory project – 61 to 80%; a less satisfactory project – 51 to 60%; and an unsatisfactory project by zero to 50%.
Under the terms, the apex bank said it will work with the fiscal authorities to facilitate power sector, port and export reforms as well as ease of doing business to improve competitiveness in Nigeria, to complement and propel this initiative.
It therefore advised interested companies with satisfactory performance to apply through their banks effective, November 1st, to the CBN Department of Development Finance, Office of the Governor, CBN, Central Business District, Abuja, with complete documentation.