Emefiele’s vision for Nigeria’ apex bank for the next five years places high emphasis on non-oil sector of the economy. This is what you get from his speech on the subject delivered in Abuja on recently. He recalled that with concerted efforts by the monetary and fiscal authorities, “we implemented a series of measures which led to the recovery of our economy from the recession by the 1st Quarter of 2017.” Several of the measures favoured the real sector of the economy.
External reserves
Said Emefiele: “Building on these efforts, I am delighted to note that our external reserves have risen from $23bn in October 2016 to over $45billion by June 2019. Inflation has dropped from 18.72 per cent in January 2017 to 11.40 per cent in May 2019. Our CBN purchasing manufacturers index has risen for 26 consecutive months since March 2017, indicating continuous growth in the manufacturing sector, as a result of measures implemented by the CBN which has improved access to raw materials and finance for manufacturing firms.”
He added that GDP growth has risen for seven consecutive quarters following the recession, and exchange rate has appreciated from over N525/$1 in February 2017 at the BDC window to N360/$1. And “with improved inflow of foreign exchange, the exchange rate has remained stable around N360/$1 for the past 27 months”.
Restriction forex on 43 items Said Emefiele:
“In order to reduce our reliance on the importation of items which could be produced in Nigeria, we restricted access to foreign exchange on 43 items, while deploying our intervention funds to support growth and productivity in the agricultural and manufacturing sectors. These measures helped to support the attainment of our monetary policy objectives such as a reduction in the inflation rate, stability in our exchange rate and improved accretion to our external reserves,” he said. A plus for the real sector.
Soft spot for the non-oil sector Stressing the apex banks soft spot for the non-oil sector of the Nigerian economy, he said: “As part of the goals set in 2014, we increased our development finance interventions in order to catalyze growth in critical sectors of the economy.
Our objectives were driven by the need to increase investments by MSMES as well as spur consumer spending, as these factors would have a positive impact on GDP growth and employment. Furthermore, our development finance efforts were driven by the need to reduce our reliance on revenues from crude oil.
“At a point in our nation’s history, Nigeria survived on revenues from the non-oil sector, to the extent that we were a dominant exporter of agricultural produce into the global market.
Some of these products include Cocoa, Groundnuts, Cotton and Palm-oil. Our focus in agriculture supported the raw material needs of our industrial sector and created employment opportunities for millions of Nigerians.
Regrettably, the discovery of crude oil and the increasing reliance on crude oil revenues led to a severe downturn in the agriculture and manufacturing sectors, while also exposing our economy to the vulnerabilities that normally accompany cilities such as the Commercial Agricultural Credit Scheme, and the Real Sector Support Fund.
These funds were used to channel single digit interest loans through our Deposit Money Banks and other Participating Financial Institutions to beneficiaries to support improved growth in the agriculture and manufacturing sectors.
The effectiveness of these interventions in supporting the growth of our local industries has been supported by our FOREX restrictions on the importation of items that can be produced in Nigeria.
We also embarked on measures to discourage smuggling of restricted items into the country, by imposing restrictions on the use of financial institutions in Nigeria by identified smugglers, as their activities undermined the growth of our local industries.
These measures are aiding our efforts to support local cultivation of goods in areas such as cotton, rice, palm oil etc.
Credit for MSMES/ Small- holder Farmers
“We also sought to improve access to credit for MSMES given the critical role they play in supporting the growth of our economy. Poor access to credit has been highlighted as a significant constraint to the growth of MSMES. Moreover, given the impact of the recession, it was more important to restart the flow of credit to MSMES to enable them engage in productive activities that would support growth. As part of efforts to support this objective, we created a N220bn MSME funds, which has been critical in supporting the growth of MSMES in the agriculture and manufacturing sectors.”
Entrepreneurship/diversification of the economy
He added: “Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry. This group deserves our encouragement. We shall also during this intervening period encourage our Deposit Money Banks to direct more focus in supporting the Education Sector. Fourth, grow our external reserves; and fifth, support efforts at diversifying the economy through our intervention programmes in the agriculture and manufacturing sectors. We are confident that when implemented, these measures will help to insulate our economy from potential
