By Emma Ujah & Babajide Komolafe

THE Central Bank of Nigeria, CBN, has set aside over N1 trillion to promote lending to the real sector of the economy with a view to stimulating economic activities in the country. The Governor of the CBN, Mr. Godwin Emefiele, disclosed this at the 21st Seminar for Finance Correspondents and Business Editors in Ibadan, Oyo State capital, yesterday.

CBN Governor, Mr Godwin Emefiele
CBN Governor, Mr Godwin Emefiele

Mr. Emefiele who spoke through the Deputy Governor, Corporate Services, Mr. Adebayo Adelabu, justified the massive interventions of the apex bank in financing the real sector of the economy, saying  that the current trend in global central banking has gone beyond the core functions of monetary policy management.

Infrastructure interventions

His said, “At the CBN, our approach to real sector development is three-pronged.  Our interventions centre around agriculture, Micro, Small and Medium Enterprises, MSMEs and Infrastructure interventions.

“The interventions included the N300 billion Real Sector Support Facility  RSSF; the N220 billion Micro, Small and Medium Enterprises Development Fund, MSMEDF; the N213 billion Nigeria Electricity Market Stabilisation Fund; N500 billion Non-Oil Export Stimulation Facility; and the N75 billion Nigeria Incentive Based Risk Sharing for Agricultural Lending, NIRSAL.”

According to him, the principle behind the various interventions were to provide operators in the real sector single-interests loans of between 6-9 per cent at longer tenors, with alternative collaterals, which were the major hindrances to Deposit Money Banks’ lending to the sectors.

He said,  “The major complaints of the real sector operators were categorized into three:  double –digit interest rates; shortness of the tenors of the loans from the Deposit money Banks; and non-availability of collaterals.

“Based on that, the CBN’s interventions have been designed with  a view to addressing all of these.  That is why the interests rates of the interventions range between 6-9 per cent.  Our funding in each case provides for long terms, with some as much as 10-15 years; and we have designed alternative securities especially for the loans to the Micro, Small, Micro and Medium Enterprises, MSMEs and small holders in the agricultural chain”.

On the current roles of central banks, the CBN boss explained that even the US Federal Reserve and the Bank of England, among others, had intervened in the economies of those countries, with a  view to stimulating productive activities, at very critical times. “The Fed and the Bank of England have done these over the years.  It is the trend all over the world.  The real sectors are the engines of every economy.  Central banking’s responsibilities , now transcends the orthodox responsibilities of monetary activities to developmental activities.

“Through these interventions the bank creates more opportunities for the realization of the potentials of the real sectors of the economy which will lead to significant job creation, increased Gross Domestic Product , GDP, growth and by extension, with more export, we will increase our foreign reserve,” he said.

Mr. Emefiele who has been passionate about the need to cut the excess import-dependency of the Nigerian economy, urged that Nigerians must increase local production and reduce the imports of especially items that can be produced locally.

This, he said has become more critical, as he disclosed that the nation’s foreign reserve has fallen below $28 billion and that urgent steps must be taken to arrest the situation.

China has as much as $3.3 trillion foreign reserves.

Earlier in his personal remarks, Deputy Governor, Adelabu said there was urgent need for Nigerians to patronize made-in-Nigeria goods as a lot of foreign exchange could be conserved, by doing so.

He cited the policy of the Ghanaian government in which it was legislated that all  members of the public both in government employment and those employed in the private sector must wear locally made “Ankara”, “Kente” or “Tulip” , at least two days in a week.

According to him, that policy played a major role in revamping the Ghanaian textile industry, so much that that country’s textile industry now imports large volume of its products to Nigeria and other markets in the region.

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