How CBN’s Devt Financing Under Emefiele Reduced Nigeria’s Food Import Bill from $3.23bn to $0.59bn in 4Years
Ex-apex bank's boss threatens N1bn suit against Akpabio over alleged defamatory remarks
Development financing efforts by the erstwhile Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, resulted in the decline of Nigeria’s food import bill from $3.23 billion to $0.59 billion in four years.
The CBN intervenes in the real sector to achieve a variety of economic targets, including to stimulate affordable and sustainable finance to priority sectors of the economy, particularly agriculture, manufacturing and small businesses.
Other broad objectives of the programmes are: Increased output, creation of jobs, contribution to accumulation of foreign reserves, expansion of the industrial base and diversification of the economy.
A statement by one of Emefiele‘s lawyers, Wale Fapohunda, said that for instance, in agriculture, a total of 4,590,039 smallholder farmers cultivating 6,135,150 hectares of 21 agricultural commodities were financed across the 36 states and Abuja under the Anchor Borrowers’ Programme (ABP).
“The ABP contributed 2.0 – 2.5 million metric tonnes of rice paddy annually to national output. It also supported maize production with 1,126,736 metric tonnes from financed projects across the country, as well as cultivation of 1,413,930 MT of cassava and the domestic production of its derivatives,” the statement stressed.
It also stated that the intervention contributed to the significant increase in the average national food output growth rate to 28.44 per cent under the Commercial Agricultural Credit Scheme (CACS) from the average of 9.96 per cent prior to its introduction.
Under CACS, the bank said it financed the expansion of agriculture operations with 67.6 per cent of financed projects acquiring new or additional equipment.
“(There was) progressive decline in the nation’s major food import bill from $3.23 billion in 2014 to $0.59 billion in 2018. This represents an 82 per cent decline in import bill. Of particular note are rice and wheat import bills which decreased by 98 per cent and 95 per cent in the period respectively.
“Improvements in milling capacities of domestic rice companies rose due to the increase from seven integrated rice mills in 2015 to 72 in 2023. Specifically, milling capacity increased from 329,000MT to 3,000,000MT in the same period. This was made possible through enhanced access to finance as a result of the bank’s intervention in the sector,” it showed.
To support the resilience of the Nigerian manufacturing industry, the lawyer stated that a N1 trillion real sector facility was introduced under two initiatives, namely: Real Sector Support Facility – Differentiated Cash Reserve Requirement (RSSF-DCRR) and Covid-19 Intervention for the Manufacturing Sector (CIMS).
Under the intervention, the bank, he said, supported 255 real sector projects, of which 174 projects were financed under the RSSF-DCRR, comprising 87 light manufacturing projects, 40 agro-based projects, 36 projects in the services sector and 11 mining projects.
Also, under the real sector support facility, capacity utilisation of beneficiary enterprises was estimated to have improved by 29 per cent.
“The CBN supported the production of 946,265 MT (19 million bags) of locally blended fertilisers through the bank’s financing of 42 local blending plants from the original two, which helped reduce the price of fertiliser to N5,500 per bag,” it added.
In terms of small businesses, under Emefiele’s watch the Agribusiness Small and Medium Enterprise Investment Scheme (AgSMEIS), financed 40,884 projects in agriculture, cottage industry, manufacturing, and services, amongst others.
On youth empowerment, the Bank, according to Fapohunda, introduced the Creative Industry
Financing Initiative (CIFI) with relaxed access requirements for entrepreneurs and investors in the fashion industry, information technology, movies and music production.
The bank also financed 373 projects across fashion, software development, information technology (IT), movie distribution and movie production verticals. Some of the top Nollywood movies financed under CIFI include: The Legend of Inikpi, Yeku, Tiwa’s Baggage and Damaged Goods. The initiative also created significant number of direct and indirect jobs, he added.
As part of its efforts to cushion the impact of the Covid-19 pandemic on households and businesses in Nigeria, the Bank, the statement explained, introduced the Targeted Credit Facility (TCF).
Under the intervention, the CBN financed 830,831 beneficiaries, comprising 684,441 households and 146,390 SMEs.
In responding to the youth unemployment challenge in Nigeria, the CBN provided a N12.5 billion seed fund for the Nigeria Youth Investment Fund (NYIF), while under the intervention, disbursements were made to 7,057 beneficiaries, comprising 4,411 individuals and 2,646 small businesses across the country.
As for the bank’s Entrepreneurship Development Centres (EDC) initiative, 55,422 nascent entrepreneurs were trained, with 18,598 having access to single digit finance which led to the creation of 37,069 jobs.
In response to the increase in demand for medical and pharmaceutical products and services due to the pandemic, the CBN introduced the Healthcare Sector Intervention Facility (HSIF) to support the resilience of the Nigerian healthcare sector.
According to the statement, the scheme financed 137 healthcare projects, of which 34 were pharmaceuticals, 84 hospitals and 19 other healthcare service projects.
Specifically, the HSIF supported the acquisition and installation of 60 Magnetic Resonance Imaging (MRI) machines, 42 Computerised Tomography (CT) scanners, and 4 Oncological machines in hospitals across the country.
It also led to the creation of 109,500 direct and indirect jobs, as well as the expansion of production lines in various pharmaceutical companies across the country.
In the energy sector, a total of 1,403.3 MW of power supply was financed under the Bank’s energy and infrastructure schemes to produce a new capacity of 944.3 MW.
“Industries serviced included Fast Moving Consumer Goods – FMCG (4.4 per cent ); Steel Production (10.45 per cent); Cement (27.9 per cent); Packaging (12 per cent); Agro Allied (0.7 per cent); Wood Products (2.0 per cent).
“The Fund also financed the construction of a 120 – kilometre natural gas pipeline from Ikpa Anang in Akwa –Ibom State to Mfamosing near Calabar, Cross River State,” it said.
It added that under the Power and Airline Intervention Facility (PAIF), the CBN created a cash flow for recurrent expenditure through the interest differential brought about by the average interest rate gap of over 9 per cent (average lending rate of 18 per cent to a maximum ceiling of 9 per cent under PAIF).
The cost savings were to be used to enhance the operational efficiency of the benefitting companies in terms of increase in output and in areas of job creation.