By Babajide Komolafe
The Bankers Committee yesterday announced a N200 billion credit facility to boost production and export of five cash crops. The cash crops are Coaca, Oil Palm, Shea Butter, Sesame Seed and Cashew.
The Committee also said it would soon announce a credit facility to support the creative industry with the aim of creating 300,000 jobs in the industry.
Managing Director/Chief Executive, UBA Plc, Mr. Kennedy Uzoka and Managing Director/Chief Executive, GTBank Plc, Mr. Segun Agbaje, disclosed this in Lagos while speaking at a press conference after the meeting. The press conference was also addressed by the Managing Director/Chief Executive, Access Bank Plc, Mr. Herbert Wigwe, Managing Director/Chief Executive, Ecobank Nigeria, Mr. Patrick Akinwuntan, Director, Banking Supervision Department, Central Bank of Nigeria (CBN), Mr. Ahmed Abdullahi and Director, Corporate Communications, CBN, Mr. Isaac Okoroafor.
Speaking Abdullahi said that the Committee noted the stability in the economy especially improved foreign investors confidence in the nation’s economy which reflected in the $6 billion foreign portfolio investment inflow in the first quarter through the Investors and Exporters (I&E) window, the Committee decided to focus on initiatives that will consolidate the pro growth stance of the CBN, via the recent reduction the Monetary Policy Rate (MPR) to 13.5 percent from 14 percent.
N200bn facility for cash crops
Kennedy Uzoka of UBA said that this led to the decision to set up the fund to boost production and export of cash crops.
He said the N200 billion will be extended as loans to companies producing any of the five cash crops, at single digit interest rate for up to ten years tenor.
He said: “As you know we have always talked about Nigeria been a mono economy, oil only, and many seminars have happened with so many resolutions. But the committee believe we have not made much progress in this direction hence that was the theme of the retreat.
“And in terms of the policies that drive exports, we believe that a lot of them have to be changed. And we know about the congestion at the port. So we looked at all these things and we broke them into immediate, medium and long term because some we cannot address within a short period.
“Fortunately CBN has different kind of funds. We looked at the existing funding structure so that we don’t reinvent the wheel, and see which of these funds can address the current challenges. And we did find a lot. Also we looked at the viability of these products in terms if we do this how will it help exports, address employment issues, create the necessary economic activities and also create relief in terms of foreign exchange (forex). This is because if a commodity, we add value to it, it will create employment and that we save us forex, as against what we do today, that most of our products are exported in raw forms. And indeed there are some of these things that with just a little push, we can either get to the final stage of refining we can get just close to that.
“We have gone further to break this down to which of these products we should focus on, Oil palm as you all know, we use to be number one, and we decided to focus on that. Cocoa is another area, Sesame Seed is another area and off course Shea butter and cashew. “We are going ahead with these, applying the existing fund that we have identified in CBN. And based on the meeting we had today, we are going to be lending at single digit, up to a maximum of 10 years to each of these depending on the particular product and the stage of the company and we are going to devote almost N200 billion, and this will change the narrative of export in Nigeria”.
To set up credit facility for creative industry
On his part, MD/CEO of GTBank Plc, Mr. Segun Agbaje, said that the Committee also decided to set up a similar credit facility for the creative industry with the hope of creating 300,000 jobs in the industry.
He said: “This is basically a follow up to the last Bankers Committee retreat where we briefed the entire industry about the work the Committee was doing with respect to creative services and IT sectors.
A lot more work has been done and there are four verticals; one has to do with movies, the other has to do with music, the third has to do with IT and of course, the fourth has to do with fashion and what we have decided to do is to take it to the next level which is basically to revisit the entire value chain of each of these verticals. So right from the production facilities all the way to the last mile in terms of capacity building and making sure that whatever is introduced along each of the verticals is such that it is of world class standard.
Today at the Bankers Committee we got the final nod to take it to the next level which is simply to do a final presentation and share with the market how it is going to happen. So I would imagine that sometime next week there would be some advertorials out in the market for eligible people who want to participate in each of the verticals, I am talking of people who want to be beneficiaries of the facilities which would be given.
“The loans are for a maximum of ten years. They are single digit interest rate loans and of course they are reflective on the fact that in this specific industry, what it requires is long term financing, single digit funding and of course while we may ask for collateral but it will be very flexible. I think it is a big initiative because it will bring a couple of things to our country. As a starting point, it will lead to about 300,000 employment in terms of number of people who are employed over a five year life span.
“It will lead to significant appreciation as long as foreign exchange is concerned coming from each of the verticals and of course also lead to significant savings that you see today, the textile industry where most of the things that are produced are done oversees with textiles and the entire production facilities. So that is the thrust and so we expect, now it is imminent, by next week or the week after, hopefully, we should start seeing advertorials from beneficiaries who would be public-screened to make sure that they meet the eligibility criteria.”
CBN laying building blocks to power economic growth
Speaking further on the philosophy behind these initiatives, Isaac Okoroafor of CBN said: “With the stability recorded across all the macro magnitudes, the time has come to make the economy grow, to supply a stimulus that the economy requires to grow and so that is why the stories you have received today are in the logic of even what we have done at the CBN in cotton, garment, and textile as well as in palm produce. we are going into cocoa and other commodities and then into the creative industry. All these are building blocks that are been put in place to enable the economy power itself in growth.”