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Emefiele’s interventions save the economy from crisis



Amended 20-count charge: Emefiele enters not guilty plea as court adjourns to Feb

By Uche Chris

Never in the history of the country has the Central Bank of Nigeria, CBN played such an active and interventionist role in the economy, as under its present leadership. With the renewed prospect of recovery as reported by the recent International Monetary Fund, IMF findings, it is now evident that the policies of the CBN on the economy were constructive and well-targeted.

In fact, in the near absence of discernible fiscal policies to rescue and drive the economy, Nigerians have come to expect and indeed, rely onthe CBN to provide the needed leadership and succourfor the distressed economy.

With the proposed International Finance centre and Infrastructure Corporation, which will raise N15 trillion for infrastructure development expected to kick in in 2022, Emefiele and the CBN would be transforming the economy beyond the capacity of government.

Appointed at a time of severe economic challenge in 2014 as CBN governor, Mr. Godwin Emefiele had his job clearly cut out for him and he seemed to have understood the peculiar call of duty in which he is to operate. Under a high profile and visible finance minister, such as Dr. NgoziOkonjoIweala, the leadership quality of Mr. Emefiele was somewhat minimized.

Actually, many people had mocked his appointed and doubted his capacity to lead the monetary authority of the county in such a troubled time and as a successor to such a vibrant and highly controversial CBM governor asMr. LamidoSanusi. But with time, Emefiele has silenced his critics and traducers with his purposeful leadership.

However, the coming of the present administration with its disruptive economic policies that negated 16 years of positive economic reforms, coupled with the deepening crisis in the oil sector, which saw government revenue plunge and oil price crashed, and without effective fiscal policy response, Mr. Emefiele suddenly rose to the challenge.

All over the world, governments were pumping money into the economies for one stimulus package or the other to beat back the threatening economic collapse, except in Nigeria, where the government not only lacked the coordinated and definite policy to address the problem but also the political will and financial resources.

In vain Nigerians and the international community looked up to the government for initiatives to address the emerging challenges. When eventually the Economic Recovery and Growth Plan was introduced after two years of waiting, it was a half-heated and conflicting measure that promised much and delivered little; it was dead on arrival.

So the burden naturally fell on the CBN to play the policeman of the economy, and instead of the finance minister announcing and championing the rescue package, it was sadly the CBN that bail out the economy through financial interventions in different sectors of the economy to stem off total meltdown.

It is obvious that without the active role of the CBN under Emefiele to drive some key policies of government, such as diversification,reviving the real sector and agriculture etc. the economy would have been in far worse condition than the two recessions and less than two percent average GDP growth it experienced in six years under the administration.

His consistent response to criticisms of over reaching his mandate has been that government is a collective and united body and should be unnecessarily segmented as the success one is the success of others.

“Government is one and we are all working toward the same objective. We, at the CBN cannot sit back and fold our arms when there are things to be done and we know we can contribute; let us save the economy first then, people can talk about who did what later,” he told ARISE television recently.

At the end of December 2020, the CBN had committed N4.2 trillion in intervention funds disbursed to various sectors such as agriculture, particularly the Anchore Borrowing programmeto boost rice production and as well as other six cash and food products; manufacturing and SMEs, entertainment, and power.

However, it was during the advent of the Covid 19 pandemic that the CBN under Emefiele played its most progressive and positive interventionist role to not only save the economy but Nigerian lives from the plague.

He mobilized the private sector, the only case in the world, in response to the challenge, in the face of government incapacity, and raised almost N18 billion, which was deployed in building isolation centres in Lagos and Abuja, the two most affected cities, and providing relief package for the people under the aegis of CACOVID.


Specifically, there are 23 major intervention programmes for which N4.23 trillion has been disbursed by the CBN across three million projects.Remarkably, the CBN has an intervention fund for almost every single economic sector. A breakdown of these sectors show agriculture sector received. N1.47 trillion; power sector received N1.06 trillion, and SMEs (across Manufacturing, Trade, Transportation)received N1.15 trillion.

However, the positive effects of these interventions are being constrained by conflicting fiscal, political and insecurity policies and challenges. For instance, the activities of herdsmen, who are perceived to enjoy government protection have chased farmers away from their farms, thus endangering the loans extended to them by the CBN and worsening food crisis.

Also government fiscal policies such as VAT, which was raised from five to seven percent and tax drive, such as Stamp Duty and fees of electronic cash transfers, have put many startups and SMEs under pressure and some completely out of business, again defeating the objective of the interventions to improve the economy.

As such, of the N4.23 trillion disbursed, only N1.16 trillion (or 27.5%) has been repaid. Thus N3.07 trillion (or 72.5% remains outstanding. This is sad because it would constrain the ability of the Bank to continue funding them.s

According to data from the CBN Economic Report for April, 2021 farmers who subscribed to the CBN’s Anchor Borrowers’ Programme owed the apex bank N463bn as of the end of March 2021.

The ABP was launched on November 17, 2015, to reverse the country’s negative balance of payments, especially in the area of food. Beneficiaries of the programme include farmers cultivating cereals (rice, maize, wheat, etc.), cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock.

The CBN report revealed that from the inception of the ABP in November 2015 to March 31 this year, the sum of N492bn had been disbursed to 3.04 million farmers.The report, however, showed that only N152.3bn had been repaid by the beneficiaries while the outstanding loans stood at N463bn.

“For the Anchor Borrowers’ Programme, the sum of N615.4bn had been disbursed to 3,038,899 beneficiaries, out of which N152.3bn was repaid,” it said.As at August it was learnt that the CBN’s unpaid loan as of November 2020 stood at N378.5bn.

According to the CBN’s guidelines for the ABP, the broad objective of the programme is to create economic linkage between smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilisation of agricultural firms.

Economic experts, who reviewed loan repayments under the programme, linked rising default rate to rising insecurity in certain parts of the country, especially the food-producing states.

Dr.Olufemi Omoyele, director of Entrepreneurship at Redeemers University told Business Hallmark that, “While the initiative of loans to entrepreneurs and farmers was commendable, its success, which could be measured by the repayment rate, was being hampered by the security problems in the country.

“What are we saying, everyone knows the high level of insecurity in the country, most especially in the northern part where farmers cannot go to farms; so tell him how they will get money to pay back when their farmlands have been ravaged by cattle of the herdsmen.”

Dr. Adeniyi Oshatomi, an economist agreed with Omoyele’s submission, saying the programme’s effectiveness was limited by the rising wave of insecurity in the country.

Meanwhile, the CBN says it has disbursed a total of N788.035bn to four million farmers in the country through the ABP.

The CBN Governor, Godwin Emefiele, disclosed this recently in Jos at an event to begin the Nigeria Brown Revolution programme aimed at boosting wheat production in the country.Emefiele, who was represented by the CBN Deputy Governor, Corporate Services, Edward Adamu, said, “The Anchor Borrowers’ Programme has recorded successes in supporting smallholder farmers to increase the cultivation of different commodities across the 36 states of the federation and the Federal Capital Territory.

“Through the programme, N788.035bn has been disbursed to about 4.0 million farmers through 23 participating financial institutions. So far, 4.796 million hectares of farmlands have been cultivated under the programme covering 21 commodities.”


According to the CBN, wheat is the third most widely consumed grain in Nigeria after maize and rice, with the country producing only about one per cent (63,000 metric tonnes) of the five to six million metric tonnes of the commodity consumed annually in Nigeria.

He said, “This enormous demand-supply gap is bridged with over $2bn spent annually on wheat importation. This has made wheat the second highest contributor to the country’s food import bill.

“Given the high growth rate of the country’s population and the demographic structure, the demand for wheat is projected to continue to rise. This can only intensify pressure on the country’s reserves unless we take a decisive step to grow wheat locally.” So the Bank has banned funding wheat import from December.

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