By Tony Obiechina, Abuja
The Central Bank of Nigeria (CBN) says it will contribute over N1.8 trillion of the total sum of N2.30 trillion needed by the Federal Government for the 1-year Economic Sustainability Plan (ESP).
The CBN Governor, Mr Godwin Emefiele who dropped the hint while briefing the media at the end of the Monetary Policy Committee (MPC) in Abuja on Tuesday said this would be achieved through its various financing interventions using the channels of Participating Financial Institutions (PFIs).
Emefiele noted the various interventions by the CBN to reflate the economy, improve aggregate supply and drive down inflation were largely in the areas of Manufacturing, Agriculture, Electricity & Gas, Solar Power and housing constructions among others.
He was optimistic that these initiatives will significantly ease the adverse impact of the COVID-19 pandemic and set the economy on a path of recovery.
He said so far, total disbursements from the Bank’s interventions in the wake of the COVID-19 pandemic amount to N3.5 trillion.
They include, Real Sector Funds, (N216.87 billion); COVID-19 Targeted Credit Facility (TCF), (N73.69 billion); AGSMEIS, (N54.66 billion); Pharmaceutical and Health Care Support Fund, (N44.47 billion); and Creative Industry Financing Initiative (N2.93 billion).
Emefiele explained that under the Real Sector Funds, a total of 87 projects that include 53 Manufacturing, 21 Agriculture and 13 Services projects were funded.
“In the Health Care sector, 41 projects which include 16 pharmaceuticals and 25 hospital and health care services were funded. Under the Targeted Credit Facility, 120,074 applicants have received financial support for investment capital.
“The Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) intervention has been extended to a total of 14,638 applicants, while 250 SME businesses, predominantly the youths, have benefited from the Creative Industry Financing Initiative.
“In addition to these initiatives, the CBN is set to contribute over N1.8 trillion of the total sum of N2.30 trillion needed for the Federal Government’s 1-year Economic Sustainability Plan (ESP), through its various financing interventions using the channels of Participating Financial Institutions (PFIs).
“The MPC is, thus, using this medium to appeal to our important economic stakeholders to take advantage of these intervention initiatives to help support a quick rebound in growth”, he added.
The Governor pointed out that the Bank’s policy on Loan to Deposit ratio also resulted in a significant growth in credit to various sectors from N15.57 trillion to N19.33 trillion between end-May 2019 and end-August 2020, an increase of N3.77 trillion.
“This growth in credit was mainly to manufacturing (N866.27 billion), consumer credit (N527.65 billion), oil & gas (N477.65 billion), agriculture (N287.11 billion) and construction (N270.97 billion)”, he said.
Emefiele stated that given that the currency adjustment was a causal factor in determining the price of petroleum products and energy prices, “the MPC believes that the CBN management must take bold actions to stabilize the exchange rate.
“Management was further enjoined by the MPC to continue to provide funding to sectors that will resolve the supply constraints in petrol pricing, energy pricing and food availability.
“To support household consumption, the MPC enjoined management to aggressively channel its funding to targeted households, SMEs and consumer credit by further increasing its lending activities through its NIRSAL Microfinance Bank (NMFB).
“The Management was also directed to ensure that DMBs respond to the reduction in deposit rates by aggressively lowering cost of credit to borrowers”, he said.
He said MPC noted that air and road transportation; entertainment & accommodation; food services; and education subsectors were adversely affected by the lockdown.
“It therefore suggested that more efforts be put in place to continue to provide relief and funding to these subsectors to catalyse growth and improve the output numbers”, he added.
