Since the coming on board of President Buhari and his fellow “change agents” in the All Progressives Congress (APC) in 2015, one recurring theme in the governance debate remains the fundamental question of how to create national wealth in such a consistent and sustainable way as to rescue the entire economy from its sluggish growth.
Even in the pre-APC years when the economy was growing at a much higher rate, top fiscal and monetary policy big wigs were at odds about how to translate the high growth numbers into real outcomes in terms of jobs, reduced inequalities and significant reduction of poverty. In the era of Buharinomics however, not only were the growth numbers abysmally low, the drivers of growth have not been expanding enough to catch up with the realities of an exponential growth in population, an increased number of Nigerians living below the poverty line, and the ever-present problem of an economy not creating the sufficient number of jobs. It was therefore not surprising that in 2016 for instance, the economy nose-dived into a biting recession from which it struggled to emerge in the fourth quarter of 2017. There were also other far-reaching consequences; Nigeria by 2018 had overtaken India as the country with the highest number of people living below the poverty line. It was no doubt a classic case of jumping frying pan to fire; from an economy of jobless growth to one which had produced many more poor people.
In the face of these difficulties, the Central Bank of Nigeria (CBN) with Governor Godwin Emefiele had its work cut out for it within the context of speedily providing the fiscal and monetary policy responses to address the challenges in the economy.
However, the innovative stroke applied by the CBN helmsman went beyond the traditional tinkering relating to interest rates and foreign exchange controls. The CBN came to terms with the dire need to intervene in the economy in such ways and manners, which would activate the big drivers of growth and jobs. This long list of interventions sought to unleash the potentials of Nigeria’s hitherto dormant non-oil sectors through catalytic funding in order to pull the economy up by its bootstraps. The CBN presents these raft of interventions as “development finance,” a fitting allusion to the notion that beyond its routine motions, much more fundamental steps need to be taken to drive growth, create wealth and begin the process of banishing poverty.
In agriculture, for instance, the CBN’s Agricultural Credit Support Scheme (ACSS) has a prescribed fund of N50 billion. According to the bank, the ACSS was introduced to enable farmers to exploit the untapped potentials of Nigeria’s agricultural sector, reduce inflation, lower the cost of agricultural production, generate surplus for export, increase Nigeria’s foreign earnings as well as diversify its revenue base. At the national level, the scheme operates through a Central Implementation Committee (CIC) while at the Federal Capital Territory (FCT) and State levels, the Scheme operates through State Implementation Committees (SICs) instituted to ensure that the objectives are realized across the states of the federation. There is also the Commercial Agriculture Credit Scheme, CACS, which is operated in two tranches of N100 billion each to provide finance for the country’s agricultural value chain in the areas of production, processing, storage and marketing. The CBN is of the view that increased production arising from the intervention would moderate inflationary pressures and assist the Bank to achieve its goal of price stability in the country.
As a mark of its readiness to support the non-oil growth drivers, the CBN under Emefiele has aptly recognized the need to finance industries, which hold the key to jobs, and poverty reduction. Nigeria’s creativity sector is definitely one of such big growth engine. Nigeria’s film industry, Nollywood continues to make a strong showing on the global stage, not only because of the volume of output as some critics would allege but also because the industry is leveraging on the Nigerian capacity for drama. As the creative industry takes advantage of innovation and new media technologies to captures the attention and imagination of the globe, it amounts to a smart move to make available the financial resources it needs to fully realize its potentials. The CBN is there well on the mark with its decision to significantly fund the sector through Creative Industry Intervention Fund, which would provide loans of up to N500 million to entrepreneurs in the sector. The massive potentials of this sector would be seen in the trailblazing efforts of one of Nollywood’s leading lights, Genevieve Nnaji, whose well-received film, LionHeart was bought by Netflix, the global online film store for a reported $3.5 million. With more of these kinds of financial support, which the CBN is pioneering, Nigerian entrepreneurs in the creative sector would go on to do greater things by leveraging on the new climate of global opportunities.
It is equally pertinent to add that CBN’s efforts to unleash the potentials in the creative sector directly targets the youth, who bear the brunt of Nigeria’s high unemployment rate, which stood at 29.7 per cent in the second quarter of 2018, according to the Nigerian Bureau of Statistics (NBS).
Wealth creation, jobs and opportunities
Creating wealth, jobs and new opportunities for livelihoods should be the thrust of diversification agenda and the push for non-oil sector-led growth. CBN on the watch of Emefiele is certainly doing its part through initiatives, which aim to act as catalysts for the real drivers of economic growth, especially at the grassroots. However, the CBN is not the only stakeholder in this process; the entire governance process is supposed to bring about the security welfare of the people, which as stated in the constitution is the primary purpose of government. Therefore, for the long term impacts of these big bets by the CBN to be felt, other actors in the governance chain, right from the Local Government Councils to the Presidency would have to do their parts. For instance, other critical aspects of production such as power, infrastructure, and human capital have to develop in order to meet up with the overall demands of the economy. In the meantime, within its sphere of influence, the CBN appears to be striking the right chords.