December 25, (THEWILL) – Since he first assumed office on June 4, 2014, Mr Godwin Ifeanyichukwu Emefiele, Nigeria’s 10th indigenous Central Bank Governor, has been in the eye of the storm over the apex bank’s monetary policies. The reason is simple. There is an organic relationship between the Central Bank and the economy of a nation; the bank’s policies have far-reaching implications on the people’s wealth-creating abilities and standard of living. It is therefore a matter of course that Emefiele is a household name to different people for different reasons.
At one time, he was applauded by proponents of the bank’s policy initiatives. At the other, he was lambasted by critics for what they perceivee as deliberate moves to worsen an already bad situation. But this passionate Central Banker has been consistent in his actions, which underlies the fact that he means well for the nation and the economy with his boundless belief in people-oriented policies.
Unarguably, Emefiele’s coming on board as CBN Governor first in June 2014 and reappointed in June 2019, brought hope and calm to an economy that witnessed two recessions and suffered the scourge of the COVID-19 pandemic under his watch. This may not be understood and appreciated by those the policies do not favour. But as a national media platform with a ‘Nigeria-centric’ vision and mission, engaged in the ardous task of shaping public opinion through objective reporting of facts and truth, THEWILL Newspaper makes bold to say that Godwin Ifeanyichukwu Emefiele, the Governor, Central Bank of Nigeria (CBN), deserves to be recognised as our Person of the Year.
Fruitful take-off
Upon his first appointment in June 2014, Emefiele unveiled his 10-point agenda, which spelt out, unambiguously, his plan to make the CBN more people-focused.
He left no one in doubt as to the priority of his policy thrust – development finance, to create jobs and attain financial stability. He said he was committed to creating “a Central Bank that is professional, apolitical and people-focused,” which “spends its energies on building a resilient financial system that can serve the growth and development needs of our beloved country.”
He has not relented efforts at ensuring economic growth and financial stability through strategic policies that impact meaningfully on the economy. Data from the bank’s Corporate Communications Department, headed by Osita Nwanisobi, a Director, showed that the bank’s development finance interventions have created over 7 million jobs. Nwanisobi said the CBN intervention programmes, introduced under the leadership of Emefiele, were born out of a market failure and other critical issues within the nation’s economic space.
Overlooking scathing criticism from some analysts, who argued that the CBN governor had acquired renewed energy to push the bank beyond its monetary policy mandate by delving into issues beyond what the CBN Act (2007) provided, Emefiele and his team remained committed to the patriotic goal of ensuring economic stability through the bank’s several intervention programmes.
Currently, the CBN has 37 intervention funds targeted at stimulating the economy and addressing the issue of unemployment. Among is the famed Anchor Borrowers’ Programme (ABP) which brought unusual reform to Nigeria’s agricultural sector. Under the scheme, the Bank granted N756.51 billion to 3,734,938 small holder farmers cultivating 4.6 million hectares of land, of which N120.24 billion was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land. The result was a boost in productivity beyond expectation.
The ABP saw the farmers, the millers, the off-takers and others actively involved in the value chain advancement. The scheme created over 3.5 million jobs. The Emefiele-led CBN also created the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), and the Targeted Credit Facility (TCF) through which the sum of N121.57 billion was disbursed to 32,617 beneficiaries; while N318.17 billion was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Enterprises (SMEs) respectively. Under the National Youth Investment Fund (NYIF), the Bank released N3 billion to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs. Similarly, under the Creative Industry Financing Initiative (CIFI), N3.22 billion was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.
The bank also created the N100 billion Healthcare Sector Intervention Facility (HSIF), which recorded a disbursement of N98.41 billion for 103 health care projects of which 26 are pharmaceuticals and 77 are in the hospital services. Similarly, the sum of N232.54 million was disbursed to five beneficiaries under the CBN Health care Sector Research and Development Intervention (Grant) Scheme (HSRDIS) for the development of testing kits and devices for COVID-19 and Lassa fever. Recipients of these facilities have contributed meaningfully to the GDP.
To solve the lingering electricity challenge, the bank under Emefiele created the National Mass Metering Programme (NMMP); N36.04 billion was disbursed to 17 Meter Asset Providers and nine DisCos for the procurement and installation of 657,562 electricity meters. On the Nigerian Electricity Market Stabilisation Facility – 2 (NEMSF-2), the CBN released N120.29 billion to 11 DisCos, to provide liquidity support and stimulate critical infrastructure investment needed to improve service delivery and collection efficiency.
Under the N1.0 trillion real sector facility, the apex bank has released N923.41 billion to 251 real sector projects, of which 87 were in light manufacturing, 40 in agro based industry, 32 in services and 11 in mining. The CBN intervention in Cotton, Textile and Garment (CTG) led to the creation of over 620,000 direct and indirect jobs in two years.
The Presidential Fertiliser Initiative and the Shared Agent Network Expansion Facility (SANEF) were created by the Emefiele-led CBN to offer the needed support to enterprises with huge potential for job creation, conservation of foreign exchange, backward integration as well as financial inclusion.
The CBN, in collaboration with key financial institutions, deployed several measures towards improving access to finance for the MSMEs that are the engine of the economy. The creation of the National Collateral Registry (NCR) helped small businesses to leverage the opportunities to access credit for their operations. According to experts, this has encouraged MSMEs to develop a good credit rating culture at relatively lower cost from the financial institutions.
Deeper interventions
Like the stitch that saved nine, the CBN’s robust interventions saved Nigeria’s economy from crumbling under the ravaging COVID-19 pandemic, which brought global health and economic challenges. The apex bank stood up to be counted. One of the striking measures taken by the Emefiele-led team to mitigate the adverse impact of the pandemic on households and businesses was the mobilisation of key stakeholders in the Nigerian economy through the CACOVID Alliance. This led to the provision of over N27 billion in relief materials to affected households and the setting up of 39 isolation centres across the country.
Other initiatives include: A one-year extension of the moratorium on principal repayments for CBN intervention facilities; regulatory forbearance granted to banks to restructure loans given to sectors that were severely affected by the pandemic; reduction of the interest rate on CBN intervention loans from nine to five per cent.
The CBN also initiated the strengthening of the loan-to-deposit ratio (LDR) policy, which resulted in a significant rise in loans provided by financial institutions to bank customers. This was strictly enforced and erring banks sanctioned. As a result, loans given to the private sector have risen by over 21 percent over the past year. There was also the creation of a N100 billion Target Credit Facility (TCF) for affected households and small and medium enterprises through the NIRSAL Microfinance Bank.
Also, in line with its desire to stimulate the economy to boost employment across different sectors, the CBN under Emefiele introduced initiatives, such as the Intervention Facility for the National Gas Expansion Programme; the Solar Connection Intervention Facility; and the CBN Facility Homes Financing Initiative. The N220 billion MSME fund received a renewed drive.
It would be recalled that Emefiele announced measures aimed at deepening the foreign exchange market, providing more liquidity and creating more transparency in the administration of Diasporan remittances into Nigeria. With this move, all beneficiaries have unfettered access and utilisation to such foreign currency proceeds, either in forex cash or in their domiciliary account unlike before.
The CBN’s role in the establishment of the N15 trillion Infrastructure Company, (InfraCo) Fund, an independently managed fund set to drive a self-sufficient economy and to revolutionise infrastructural development in Nigeria, has been applauded by the public. The InfraCo Fund is to close national infrastructural gaps and provide a firm basis for increasing national economic development.
The ban on importation of 41 items through the official forex window generated huge controversy and was criticized by a large section of the business community. But the motive was for the interest of the economy. Indeed, Emefiele challenged all those who claimed they had the capacity to produce the affected items to show up so as to enjoy the CBN’s support in the areas of machinery and working capital. This was part of the proactive measures of the apex bank in safeguarding the international value of the Naira, frustrating the activities of speculators and dealing with noticeable failures in the market mechanism which could lead to further depreciation of the Naira.
Financial inclusion
While unfolding his second term plans in June 2019, Emefiele reiterated his commitment to drive financial inclusion with the new vigour that would facilitate access to financial services to 95 percent eligible Nigerians by 2024.
A study by this newspaper showed that alternative payment systems thrived beyond expectation during COVID-19 and the 15-months land border closure which was an indication of rapid penetration of financial inclusion drive into the countryside.
The CBN under Emefiele approved the licensing of more Payment Service Banks (PSBs) to promote a strong and credible payment system as well as deepening financial inclusion.
The overall financial inclusion target was 80 percent by 2020; EFInA data shows that only 64 percent of Nigerian adults were financially included by the end of 2020. This means that 36 percent of Nigerian adults, or 38 million adults, remain completely financially excluded.
The recent licensing of two major telecoms service providers, MTN Nigeria and Airtel Africa to join 9Mobile and Globacom as payment service banks (PSB), was a quantum leap towards achieving Emefiele’s 95 percent financial inclusion rate by 2024. PSB operators provide financial services through digital means to low-income earners and people that do not use banks or banking institutions for transactions. The essence is to bring more people into the financial inclusion space.
Positive side effects
A recent report showed that the Nigerian economy has recorded significant growth in banks credit to the private sector by 92.79 percent year-on-year to N32.64 billion in June 2021 from N16.93 billion in June 2014, when Emefiele became the governor of the CBN. The huge increase in banks credit growth was driven by the policy of Loan to Deposit Ratio (LDR), which the CBN introduced in September 2019.
Despite the headwinds associated with the pandemic, the banking industry has, however, remained relatively resilient. “This is attested to by our financial indicators with the industry Capital Adequacy Ratio (CAR) and Liquidity Ratio (LR) standing at 15.2% and 41.7%, respectively, at end-July 2021. These are above the prescribed prudential minimum.”
“Also, the Non-Performing Loan Ratio, which was 5.4% as at the same period, was above the regulatory maximum of 5% by only 40 bps. Notwithstanding these modest achievements, we cannot afford to rest on our oars as the work is far from over”, Emefiele told a delegation of financial journalists and business editors during the annual CBN-sponsored capacity building forum in Enugu last October.
Wider intervention
The Emefiele-led CBN has taken a step to restore the lost glory of the classic National Arts Theatre Complex. The Federal Executive Council (FEC) in February 2021 approved a Memorandum of Understanding (MoU) between the Ministry of Information and Culture and the Central Bank of Nigeria (CBN) Bankers Committee for the renovation of the National Theatre, Iganmu, Lagos.
Under the arrangement, the CBN and banker’s committee will invest N21.894 billion to renovate and run the theatre profitably for a period of 21 years.
The government explained that the development is a landmark approval because it has paved the way for investment in the creative industry as part of the resolve to create at least 1 million jobs in the next three years in the creative industry.
The CBN’s robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria. The high level of confidence in the payment system, between 2015 and 2020, attracted the investment of about $500m in firms run by Nigerian founders, the apex bank said.
The peak of the bank’s payment system revolution is the introduction of the central bank digital currency, the eNaira. Emefiele said the eNaira would help in attaining the goals of fostering greater inclusion using digital channels, supporting cross border payments for businesses and firms as well as providing a reliable channel for remittances inflows into the country.
“With the deployment of the eNaira, Nigerians in remote areas can conduct financial activities using their digital as well as features on phone devices. Partnering with our stakeholders in the financial industry, I believe that more Nigerians will be financially included”, Emefiele explained during the unveiling of the eNaira on October 25, 2021. Nigeria is the first in Africa and among the first in the world to adopt the Central Bank digital currency. The eNaira App recorded over 600,000 downloads within four weeks.
Satisfactory outcome
These measures, no doubt, have yielded the desired outcomes, as Nigeria begins to see the initial outline of an encouraging recovery, given the recent data released by the National Bureau of Statistics with a GDP growth put at 4.03 per cent for the third quarter of 2021, while inflation rate fell for the eighth consecutive month in November, 2021 to 15.40 per cent from 15.99 per cent recorded a month earlier (October).
“Our ultimate objective is to anchor the public’s inflation expectation at single digits in the medium to long run. We believe a low and stable inflationary environment is essential to the growth of our economy because it will help support long term planning by individuals and businesses,” the CBN governor had said.
Emefiele might have made history as the only CBN governor to be reappointed for a second term since the return to democratic rule in 1999 and one that experienced two recessions, his seven years records at CBN, a 63-year-old institution in Nigeria’s 61 years of independence, offer good reasons for Emefiele to be celebrated as the true people-focused CBN governor. Indeed, he piloted the affairs of the Bank in the most turbulent weather, yet achieved the ultimate altitude of greatest stability.
Nigeria is the better for it.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
