In order to galvanize the economy and in tandem with global economic recovery policy, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has revealed that the apex bank is committed to ensure banks raise credit facilities to agriculture sector by 10 per cent.
According to Emefiele, who stated this at the weekend in Lagos, at the Vanguard Economic Summit with theme‘Bankers’ Initiative for Economic Growth’.
Speaking at the event, Emefiele listed measures which he believed would drive and sustain the economic recovery. Some of these measures are to sustain the accommodative fiscal and monetary policy measures aimed at improving access to finance to households and businesses; prevent a resurgence in COVID-19 related cases; ensure that a significant number of the populace is properly vaccinated and Improving foreign exchange (forex)inflows into the country.
He said: “Over the next three years, we will continue to encourage the banking sector to increase its loans to the agriculture sector from four percent to 10 percent by 2024. The agriculture sector was a key driver in taking the Nigerian economy away from negative growth in the 4th quarter of 2020. It is important that we not only sustain measures aimed at increasing productivity of the sector, but also ensure that we continue to produce items that can be produced locally rather than resorting to imports of these items. More importantly our agricultural sector also offers significant opportunity for the nation to earn foreign exchange through the exports of processed agricultural products. We are also pursuing an in-depth restructuring of the Nigeria Commodities Exchange Board in order to improve access to finance as well as productivity for stakeholders in the agriculture sector.” With enhanced logistics and the provision of warehouse receipts through the Commodities Exchange, farmers will be able to access finance, expand production and supply needed goods to off-takers.
“The CBN intends to support measures that will improve our non-oil export earnings significantly. As a result, we intend to aggressively implement our N500 billion facility aimed at supporting the growth of our non-oil exports, which will help to improve non-oil export earnings. Exporters will be further encouraged to repatriate their export proceeds as stipulated under our extant laws. The CBN will continue to ensure that exporters have unfettered access to their export proceeds.
“In 2021, it is imperative that the CBN continue to provide accommodative monetary policy measures that will enable faster recovery of the economy, through improved flow of credit to households and businesses in key sectors of the economy such as Agriculture, ICT and Manufacturing. These measures are essential if we are to return our economy to a sustainable growth path, while reducing our exposure to volatility in commodity prices.
While accommodative monetary policy measures that will support growth remain paramount in our priorities for 2021, we would continue to pay attention to trends in inflation, as price stability is critical in guiding savings and investment decisions by households and businesses.
“Another sector which has emerged as a significant source of resilience in mitigating the impact of COVID-19 on the economy is Information and Communications Technology (ICT). In the 4th quarter of 2020, the ICT sector made contributions of over 14.70 percent to GDP growth, 4 percent points higher than its contributions a year earlier.
“The Central Bank in 2021would seek to encourage banks and other financial institutions to leverage ICT in improving penetration of financial services to households and SMES, while supporting productivity across key sectors in the economy.
“With the decline in revenues due to federal and state government, alternative ways of funding infrastructure are critical if we are to generate sustained growth of our economy. As we are all aware, a well-built infrastructure system can have a multiplier effect on growth by enabling the expansion of business activities in the country. That is why I am delighted that Mr. President has continued to give all the necessary approvals and support to establish the Infrastructure Corporation of Nigeria Limited. InfraCorp will be co-owned by the CBN, the African Finance Corporation and the Nigerian Sovereign Investment Authority and would become fully operational by the second quarter of 2021.
This vehicle would enable the use of 24 private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.
“The CBN has already taken several measures to increase the flow of diaspora remittances into the country using formal channels. In December 2020, we instructed all international money transfer operators (IMTOs) to provide remitters with the option of sending foreign exchange to beneficiaries in Nigeria. This new measure has helped to reduce the diversion of fx by some IMTOs, who had thrived from fx arbitrage arrangements, rather than on improving transactions volumes to Nigeria. Indeed, we have already seen remittances improve from a weekly average of about US$5 million before this policy, to over US$30 million per week. We believe this measure will help to significantly boost inflows of FX and create much more liquidity in that space.”