President Buhari’s Midterm Report: CBN Takes The Cake.
Being a farmer himself, it was easy for President Muhammadu Buhari to spot the fact that the Central Bank of Nigeria (CBN) Anchor Borrowers Programme has been making waves by having massive impact on the farming sector across the country and by extension helping in lifting up Nigeria’s economy which due to the sharp drop in crude oil price had tanked since the inception of the current administration.
President Buhari, who used the opportunity of October 1st Independence Day anniversary broadcast to Nigerians to sort of present the mid -term report of his stewardship in the past two years, also held aloft the recently launched CBN National Collateral Registry programme also known as Collaterals Bank aimed at making credit more accessible to the small scale enterprises, SMEs as another milestone achievement under his watch.
Through the new scheme, owners of SMEs and a critical mass of micro entrepreneurs who constitute over 90 per cent of the estimated 17 million registered SMEs in Nigeria creating some 32 million jobs would be able to use their movable assets such as plants and equipment, vehicles and even furniture and fixtures in their businesses as collateral for obtaining loans from banks. .
That’s a welcome departure from the past when it was mainly landed properties which are immovable and difficult for SMEs to come by that were acceptable by financial institutions as collateral.
With a critical mass of Nigerians having easier access to credit owing to the formation of the organisation now tagged collateral bank, the ensuing frenzy of business activities are guaranteed to buoy up the economy such that it could accelerate the nation’s economic recovery.
In that respect, the CBN initiative with Godwin Emefiele as governor, aimed at bolstering financial inclusion for the SMEs and micro enterprises is on point.
Another policy that gave CBN the leverage of taking the cake in Mr. President’s mid-term report is the quest for creating 10,000 jobs in the agriculture sector for unemployed youths in each of the 47 state of the federation through CBN’s development finance initiative.
The initiative which is known as Accelerated Agricultural Development Scheme (AADS) is envisioned to create a total of 360,000 jobs nationwide for youths in agriculture value chain.
It is common knowledge that unemployment and poverty are like Siamese twins which are reflective of societal challenges such as lack of visionary leadership, insecurity and bad governance standards that are inimical to human social existence.
These are the existential issues currently bedeviling Nigeria and which the relevant authorities are currently struggling to address.
According to the National Bureau of Statistics, NBS, unemployment rate that had skyrocketed to astronomical levels a year ago, has recently dipped. But with youth unemployment still reckoned to be roughly 25 per cent of the jobless , which is in excess of 20 million people who are either unemployed (or underemployed), it is not difficult to figure out why CBN has made job creation for the youths its next focal point.
Now, allow me crave your indulgence to take you behind the scene to dwell on why CBN’s Anchor Borrowers programme, which is aimed at creating a farming Renaissance might have caught President Buhari’s attention.
Following the crash of crude oil price in the international market and its debilitating effect on Nigeria’s foreign reserve which was consequently hardly enough to finance at least six months of import which is the minimum requirement for a country’s economy to be adjudged as being in good health , Emefiele knew there had to be alternative means of sourcing forex to sustain the nation’s bureaucracy which was burgeoning.
And as agriculture is the only product in which Africa and indeed Nigeria has comparative advantage in international trade, it’s unsurprising that the CBN governor decided to venture into massive funding of the sector.
That’s a move akin to United Arab Emirates, UAE’s decision some decades ago to shift some of her oil wealth from Abu Dhabi area into Dubai-formerly a quaint boating building province and by so doing transformed it into the biggest trading and tourist location in the Middle East and perhaps one of the best in the world.
As Emefiele’s initiatives are mimicking the UAE example and could facilitate putting the ailing economy on even keel, Mr. President’s Independence Day broadcast was centred on the economy with particular reference to interventions by the CBN and their positive impact on the economy.
The obviously satisfied president proudly announced the benefits of investing about N43b by the CBN in Anchor Borrowers initiative which he launched as president only in November 2015 (less than 2 years ago) and which has now generated bountiful harvest nationwide.
With over 200,000 small holder farmers cultivating 233,000 hectares of farmland across 29 states, of the federation, Mr. President had every reason to celebrate and also pat the CBN on the back.
Indeed it is a thing of joy that rice is now widely cultivated in several states ranging from kebbi, Lagos, Ebonyi to Jigawa states so much so that it is being projected that the staple commodity would sell for about N13,000 during the Yuletide which comes up in less than three months.
Considering that it is estimated that Nigeria has been spending about N1 billion daily on rice import, the rice revolution is expected to result in staggering savings in foreign exchange for the country .
Apart from rice revolution in the aforementioned states, Ondo,Edo, Delta, lmo, Cross River, Benue, Ogun,Kaduna and Plateau states have also accelerated the cultivation of wheat, maize, cotton, soya beans, poultry, cassava and groundnuts as well as cashew and potatoes amongst other cash crops. It is also worthy of mention that in 2010, the then Minister of Agriculture, Akinwunmi Adesina, stated that Nigeria spent about N632 billion importing wheat which constitutes a major part of staple food in Nigeria.
Further to that , a whopping N24 trillion, is believed by some estimates, goes towards importing food , with about N1b expended daily on rice import alone.
It may be recalled that Nigeria’s golden age was the period that groundnut pyramids competed with the minarets in the skyline of Kano, and cotton cultivated in Funtua, Katsina state area, provided raw materials that fed the ginneries and textile factories that created jobs for thousands of families in the days of yore in the northern axis of Nigeria.
Basically, the same narrative applied to cocoa crop in Western Nigeria and Oil Palm and Rubber plantations in the south-east and south-south Nigeria.
Please keep in mind that it is the cash crops listed above like groundnut, cotton, cocoa and oil palm as well as rubber that were the main foreign exchange earners for Nigeria and which funds were used to develop the four regions into the envy of many African countries( free education and first colored TV station) before the advent of crude oil that has now become more of a curse than blessing.
To underscore the squandering of Nigerian oil/gas wealth, the Nigerian Extractive Industries Trade Initiative, NEITI Executive Secretary, Waziri Adio reckons that $715 billion was earned by Nigeria in 34 years(1981-2015) but unlike the UAE, Nigeria has little or nothing to show for the huge foreign exchange inflow.
However, by shifting funds from oil/gas into the agricultural sector (As UAE did by investing funds in oil/gas from Abu Dhabi into trade and tourism in Dubai) through the Anchor Borrowers programme, Emefiele seem to be quite visionary and so also is President Buhari whose farsightedness convinced him to encourage the CBN to embark on the voyage of rejuvenating the moribund agricultural sector against the trend of public opinion.
In the thick of forex crunch a couple of years ago, Emefiele with the support of President Buhari prohibited 41 items from sourcing forex from the CBN with the justification that such items should be sourced locally through backward integration.
And the policy threw up a fire storm of some sort from latter day economists and pundits both locally and internationally who questioned the efficacy of such ‘native’ wisdom forged by Emefiele and the apex financial institution owing to necessity.
Fortuitously, that highly condemned tactic tagged ‘Tooth Pick’ economy ostensibly because importation of tooth picks with forex from CBN which Emefiele saw as subterfuge by economic saboteurs and therefore exempted it along with 40 other items from sourcing forex from the CBN, has become the economic elixir that our ailing economy needed.
Although, it made common sense, experts including those from the highly rated Economist and Time magazines of the UK and USA respectively parodied the policy.
With a legion of Nigerians returning to farming which is the number one job creator, the economy has no choice but to respond to the growth stimuli.
You can bet your hard naira that Emefiele did not get the ‘native sense’ that he has applied so far in stabilising the naira and economy from the prestigious Harvard Harvard Business School, HBS but from the school of ‘Hard Knocks-a training that can only be obtained from practical experience in the somewhat odd and unique Nigerian business environment.
But that is just one component of the string of policies being driven by the CBN in the bid to end the economic recession currently dragging the economy down.
The other component is the intervention in the SMEs sector, which according to Nigerian Bureau of Statistics, NBS is the second largest employer of labor after agriculture.
Although l am not unmindful of the