The Central Bank of Nigeria (CBN) under the leadership of Chief Godwin Emefiele has become an activist and real interventionist institution that is consistently bringing in new and highly creative initiatives aimed at supporting and boosting Nigeria’s economic growth.
The latest novel initiative in development financing by the apex Bank is its proposal, which has made an appreciable progress, to collaborate with other local and extranational financial institutions to raise a N15 trillion fund over a five-year period for the financing of infrastructure in the country.
The CBN governor said, “The CBN will promote the establishment of an InfraCo Plc. It will be a world-class infrastructure development vehicle, wholly focused on Nigeria, with combined debt and equity take-off capital of N15 trillion.” The Federal Government has approved the initiative.
He listed the key objectives of the InfraCo Plc fund, “This fund will be utilized to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets, as envisaged at the CBN Going for Growth Roundtable in March 2020.”
The CBN initiative on infrastructure development is in line with the policy thrust of the administration led by President Muhammadu Buhari to ensure that the country has adequate, evenly-spread, high grade infrastructure to support the growth of the Nigerian economy and the need of the country’s 200 million-strong population.
Indeed, the administration has demonstrated the resolve to achieve that objective by floating the Presidential Infrastructure Development Fund with an initial cash of N600 billion through which the Second Niger Bridge, the reconstruction of the Lagos-Ibadan Expressway and the Abuja-Kaduna-Kano dual carriageway are funded. The CBN governor should list the specific and locations of the Infrastructure projects the N15 trillion will finance. This will fit the pattern of ensuring a balanced spread of the projects for even national development.
Given the much-praised ongoing and completed infrastructure projects in the country, and the funding required to create new railway lines, more power generation plants, additional sea and inland ports, the Infrastructure Company Plc has come at the time it is most needed to help the country minimize its infrastructure deficit. It will also create hundreds of thousands of new jobs and preserve existing ones, thus furthering the much-applauded ambition of the Muhammadu Buhari-led Federal Government to create 100 million jobs and drastically reduce poverty in the country.
An important point which analysts believe will make the Infrastructure Company Plc a viable venture is that its financial resources would be managed by an Independent Infrastructure Fund Manager (IIFM). This will insulate it from undue influence by powerful figures who have sabotaged laudable economic initiatives by squandering borrowed money on unearned lifestyles, thereby causing the collapse of otherwise viable initiatives.
The proposal to create the InfraCo Plc with a N15 trillion fund came on the heels of other interventions by the CBN, which Emefiele said were aimed at strengthening the Nigerian economy. The interventions include the provision of “a combined stimulus package of about N3.5 trillion in targeted measures to households, businesses, manufacturers and healthcare providers. These measures are deliberately designed to both support the Federal Government’s immediate fight against COVID-19, but also to build a more resilient, more self-reliant Nigerian economy.”
Other major historic interventions by the CBN are the Anchor Borrowers Schemes designed to enhance our self-sufficiency in the production of certain commodities. The nearly one dozen commodities include Rice, Palm Oil, Cotton, Yam and Tomato. The effort has virtually ended officially-supported importation of rice, in which Nigeria is now 97 percent self-sufficient.
It can equally be recalled that the CBN has reduced interest rates on intervention facilities from 9 percent to 5 percent and created a N50 billion credit facility for households and SMEs affected by the covid-19 pandemic. It has also strengthened the Loan-Deposit Ratio regime, which is expected to encourage more lending to businesses by banks.
The CBN of Godwin Emefiele era has provided N100 billion and N1 trillion to support the Healthcare industry and to manufacturers respectively. The outcomes of these interventions were manifested in the domestic manufacture of essential health commodities used in facing the Covid-19 pandemic; and ensuring that our key factories continued to produce critical items for the wellbeing of Nigerians.
Given its roles and interventions in the fashion of an activist, trigger and stimulator of the Nigerian economy for sustainable growth, the CBN has earned a good reputation for itself and its current leadership. It should sustain those roles and the tempo of introducing new initiatives.