As FOREX war opens in a new front
By Emeka Aneto
What manner of central banking?
Generally, central banking has core focus on monetary stability, but in addition to this, in third world economies such as Nigeria, it has a major role in economic development.
Hence Godwin Emefiele would redefine his central banking with priority on development finance while building a resilient financial system that can serve the growth and development needs of the Nigeria economy. Succinctly, Emefiele’s CBN wants to be people-focused.
The apex Bank’s policies and programmes under Emefiele has been geared towards job creation and fostering inclusive growth through massive support to the micro, small and medium enterprises (MSMEs).
On this count huge achievements have been recorded, surprisingly whilst COVID-19 ravaged the economies of both developed and developing countries.
Delving into developmental issues, which the CBN Act (2007), as amended, recognises, Emefiele and his team at the CBN have remained committed to the patriotic goal of ensuring economic stability, through the Bank’s numerous interventions.
In recognition of access to finance as a key limiting factor to innovation and development in Nigeria, the CBN introduced a number of financing initiatives and schemes to facilitate the attainment of its economic development mandate.
Specifically, the long list includes the Micro, Small and Medium Enterprises Development Fund (MSMEDF), the interventions were in Agribusiness Small and Medium Enterprises Investment Scheme (AgSMEIS), Creative Industry Financing Initiative (CIFI), Targeted Credit Facility (TCF), and the Nigeria Youth Investment Fund (NYIF).
This last focal point is vital as COVID-19 has exacerbated the already bad situation of Nigeria’s youth unemployment with huge implications for social stability.
A recent report of the World Bank sighted by Vanguard, titled, ‘‘Social Protection System During COVID-19,” noted that, ‘‘before COVID-19, about 40 percent of Nigerians were living below the national poverty line, and millions more were vulnerable to falling into poverty.”
The report further stated: “Simulations suggest that the crisis could push more than 10 million Nigerians below the poverty line unless adequate mitigation measures are implemented.’’
This indicates the timeliness of the commencement of the NYIF.
Exploring the options to empower the youths against the backdrop of the social upheavals codenamed #EndSARS protest a few month ago, a social commentator, Joel Ajayi, also appraised the NYIF as an intervention by the CBN to tackle the alarming rate of joblessness amongst Nigeria’s young population.
Ajayi stated: ‘‘When unemployment grows in any given economy, disaffection, dissatisfaction and discontent follows among the affected segments of society, leaving gross consequences. This, in turn could lead to frequent crises in society and even crimes which may taint the peaceful atmosphere of such a community.’’
Ajayi also noted that the recent creation of the N75 billion NYIF to provide opportunities for the youths to engage in the Micro, Small and Medium Enterprises (MSME), is a new inventiveness put in place by the government to create employment, alleviate poverty and increase the level of economic activities that will translate into economic growth and development in the coming days.
NYIF is a youth-focused programme in which each fund approval will range from N250, 000 to N50, 000,000, with a spread across group applications, individual applications, working capital loans set at three years, with a single-digit interest rate of 5%.
Given the plan and in the seeming elusiveness of white collar jobs, NYIF would introduce self employment in the mix while fast-tracking development and quench the thirst of many Nigerian youth willing to go into businesses of their choices in the next three years.
Commenting on the initiative the Yiaga Africa Executive Director, Samson Itodo, noted that the establishment of the Youth Investment Fund underscores the commitment of the CBN to building a new Nigeria where the youth would be contributing significantly to national development.
Counting the results
Figures available to Vanguard showed that as at first quarter of this year 447,671 beneficiaries had been supported under the apex bank’s targeted credit facility across the country, with 58,229 businesses and 389,442 households affected by COVID-19 pandemic stimulated job retention across the real sector.
In the MSMEDF segment of its intervention, CBN financed 488 MSME projects nationwide, comprising 120 state projects and 368 private sector projects in agriculture, manufacturing, services, renewable energy and trading with 216,706 direct and indirect jobs created across the country.
There were also 55,422 budding entrepreneurs trained under the Entrepreneurship Development Centres established under the intervention.
The data presented by the bank’s director in charge of development finance, Philip Yila Yusuf, at a seminar for Business Editors and Finance Correspondents organised by the CBN, show that 28,961 agribusiness and artisanal projects were financed across the country, while 107,932 direct and indirect jobs were created under its Agribusiness Small and Medium Enterprises Investment Scheme (AgSMEIS).
Yusuf said CBN has financed 395 youth-owned projects in various sectors of the economy in line with its resolve to support entrepreneurial aspirations of youth MSMEs.
According to the CBN, the objective of the Fund is to channel low cost funds to the MSME sub-sector of the Nigerian economy through Participating Financial Institutions (PFIs) to enhance access by MSMEs to financial services; Increase productivity and output of microenterprises; Create jobs; and Engender inclusive growth.
The eligible enterprises under the Fund include: enterprises in the agric value chain, cottage industries, artisans, services, renewable energy/energy efficient product and technologies, as well as trade and general commerce.
The Forex war
Perhaps the most virulent in the policy mix of Emefiele’s CBN is the foreign exchange market. The apex bank has been up in war with the big and powerful interest groups that have held the external sector to ransom over the years, and last week, the apex bank finally gave an unexpected hit at the syndicates, barring operators of the Bureau de Changes, BDC, from its official foreign exchange supply window.
Presenting the outcome of the Monetary Policy Committee (MPC) meeting in Abuja last week, the CBN Governor, Mr. Godwin Emefiele, had said that the decision to stop sale of forex to BDCs was because they were aiding money laundering.
Most commentators on this development have blamed the political class for corrupting, the otherwise, a laoudable structure of retail forex market, adding that CBN’s action was both bold and timely.
They expected the apex bank to rally the commercial banks and ensure stability in the forex market despite the shake up and plans by those affected to sabotage the new arrangement.
Also the nation’s foreign reserves is expected to be further protected and efficiently managed with this new order, while Emefiele takes the credit for taking the bull by the horn.
Growing up, schooling
Godwin Emefiele was born on August 4, 1961 in Lagos State, Nigeria. An indigene of Ika South Local Government Area of Delta State, Emefiele had his primary and secondary school education in Lagos before proceeding to study Banking and Finance at the University of Nigeria, Nsukka, where he obtained a Bachelor of Science Degree (Second Class Upper Division) in June 1984, and in October 1986, he obtained Master of Business Administration (MBA) Degree in Finance, winning the Best Graduating Student Award.
He later engaged in Executive studies at Stanford University, Harvard University (2004) and Wharton School of Business (2005).
Career banker, family man
Before his banking career, he was a lecturer in Finance and Insurance in two Nigerian universities. Emefiele joined Zenith Bank Plc, at its inception in 1990, and rose to become the Group Managing Director of the Bank in August 2010, midwifing the transition of the bank from the owner-CEO.
Under Emefiele’s leadership, Zenith Bank strengthened its position as a leading financial institution in Africa, winning recognition and endorsement at home and abroad for giant strides in key performance areas like corporate governance, service delivery and deployment of cutting-edge ICT.
On June 3, 2014, Emefiele assumed office as the tenth indigenous Governor of the CBN.
Emefiele is a recipient of the prestigious Zik Prize for professional leadership as well as several other awards from leading Nigerian and international media organisations, for the role he has played in the financial stability and economic growth of the country.
A holder of the National Honour of the Commander of the Order of the Niger (CON), Emefiele is married to Margaret Emefiele and they are blessed with children.