How seven banks disbursed N23.2bn under CBN’s 100 for 100 scheme

An update published on the website of the Central Bank of Nigeria (CBN) indicated that seven Deposit Money Banks (DMBs) disbursed a total of N23.2 billion under the 100 for 100 initiative of the apex bank.

On October 2021, the CBN introduced a new programme known as 100 for 100 PPP’ Policy on Production and Productivity to boost local production and productivity in various sectors of the economy.

So far, 28 companies across the country have benefited from the initiative. These include 14 manufacturing companies, 12 agriculture sector, and two companies from the healthcare sector.

The seven banks that participated in the disbursement include Zenith Bank, Fidelity Bank, Stanbic IBTC Bank, Wema Bank, FCMB, Union Bank and Keystone Bank.

A breakdown of the disbursement showed that Zenith Bank disbursed a total of N9.2 billion to 11 companies in the manufacturing, agriculture and healthcare sectors. The bank also disbursed N2 billion to Sarsoli Limited, a Lagos-based company to be used for the purchase of calcium-carbonate, filler and black master batches, while N1.2 billion was disbursed to J.O.F. Nigeria Limited, for the completion of its salt factory in Lagos.

Fidelity Bank disbursed a total of N5.7 billion to four companies in the manufacturing and healthcare sectors, including N2 billion facility to Diamond Super Sacks Limited for the acquisition of woven sacks and polytwines making machine for its factory, located in Kano, while Mecure, a Lagos-based healthcare company, secured N1.5 billion loan for the purchase of equipment for its Onchology Centre.

Other companies funded by Fidelity Bank include Juddy Bolema Industries Limited, which received N1.3 billion for the expansion of its factory and purchase of plant and machinery for the recycling of plastic waste.

Also participating in the disbursement was Stanbic IBTC Bank, which disbursed a total of N3.32 billion to four companies in the manufacturing and agro-allied sectors.

The bank advanced N1.9 billion to Lanre Shittu Motors, for the expansion of Phase 2 of its local automobile assembling plant in the Federal Capital Territory. In addition, the bank extended N1 billion to Wewood Limited to underwrite the cost of constructing a warehouse in Edo State, among others.

Furthermore, FCMB disbursed N1.1 billion to three companies playing in the manufacturing and agribusiness segment.

Wema Bank disbursed N450 million to Food Solutions Livestock Limited for the expansion of its poultry farming in Oyo State, while Union Bank, extended N2.3 billion to three companies in the agriculture and manufacturing sectors.

Another bank, Keystone Bank disbursed N998 million to Lamb Ranches Limited for the acquisition of farm input for cattle breeding in Rivers State.

“Our mission, through these initiatives, will be to prioritise companies who showcase verifiable progress in our import substitution and job creation drive. Soon, we will unveil the new foreign exchange bidding that is market-driven, to support companies that give priorities to our local products and job creation initiative, Godwin Emefiele, governor of the CBN said at a press conference in Abuja.

He told the beneficiaries to judiciously use the funds for the purpose to which they have indicated, saying the CBN has a team of independent monitors and evaluators in place, and that on regular basis the team will see the progress of the projects.

“We are interested in increasing jobs, reducing reliance on imports and effectively growing our economy,” he said while explaining that five of the projects are greenfield projects trying to explore the huge opportunities in key sectors.

In an effort to stimulate the flow of credit to the real sector of the economy in order to reverse the nation’s over-reliance on import, the Central Bank on November 1, 2021 issued the guidelines for the implementation of the 100 for 100 Policy for Production and Productivity (100 for 100 PPP) for eligible private companies with potential to immediately transform and catalyse the productive base of the economy.

“The CBN’s recently introduced 100 for 100 policy on production and productivity targeted at increasing non-oil exports and improving foreign exchange supply would also help re-invigorate local industry to replace imports and fuel growth,” Aisha Ahmad, deputy director, financial systems stability Directorate, CBN, said.

In October 2021, the CBN commenced selecting high-impact companies and projects under its 100 for 100 Policy.

The banking sector regulator stated that the selection criteria for participation under the CBN’s 100 for 100 PPP shall be premised on immediate contribution to economic growth, jobs creation, and social impact.

In selecting the companies and projects, the CBN outlined certain evidence -based, transparent and measurable criteria to be deployed.

One of such criteria is that 50 percent of raw material input should be sourced locally (15 >80 percent) of jobs created should be for Nigerians.

Another criterion is that the CBN Intervention under the 100 for 100 PPP instrument shall provide Naira intervention funding under existing CBN intervention processes; complete FX funding for new machinery. Also, it says the instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to independent evaluation by international Audit firms.

All intervention under the project will be made public and published in national dailies.

The CBN said it will work with fiscal authorities to facilitate power sector, port and export reforms as well as ease of doing business to improve competitiveness in Nigeria so as to complement and propel the initiative.

In his personal statement at the November 2021 Monetary Policy Committee (MPC) meeting, , Kingsley Obiora, deputy governor of the CBN, said “I support the current effort of the Bank for introducing the 100 for 100 Policy on Production and Productivity (PPP). The policy will boost production in the manufacturing sector; reduce imports and expand the non-oil exports; improve accretion to external reserves; and ensure exchange rate stability.”

The initiative, 100 for 100 PPP, is a financial instrument designed to create the flow of finance and investments to enterprises with potential to catalyse sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity.

According to the guidelines, quarterly, starting from November 1, 2021, the initiative shall select 100 private sector companies with projects that have potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.

The initiative, which shall be bank-led, will be rolled over every 100 days (that is, quarterly) with new set of companies selected for financing under the initiative. The initiative shall be implemented in collaboration with relevant stakeholders with focus on micro and macroeconomic impacts, in terms of contribution to GDP and exports, sustainable jobs created, local content development, production output, and capacity utilisation and integration into the global value chain. The guideline outlines the operational modalities for the instrument.

The broad objective of the initiative is to reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right projects with potential to transform and catalyse the productive base of the economy.

Emefiele said under the program, targeted credit of up to N5bn will be provided to 100 firms every 100 days, provided that these firms are investing in projects that are greenfield projects. Second, projects will be assessed on their ability to generate significant employment opportunities in critical sectors of our economy.

He said eligible firms must show evidence of their efforts to harness available local raw materials towards the realization of their intended investment. Efforts will also be made to support firms that are geared towards producing goods for the export market.

“The Central Bank of Nigeria is committed to supporting eligible firms with foreign exchange to import machineries and equipment. Let me add that routine audits will be conducted on firms that receive funding, to ensure that they are complying with the terms of the program.

“We believe this program will significantly help to catalyze growth in critical sectors of our economy, while aiding our efforts to create employment opportunities and reduce our dependence on imported goods,” he said.