From Uche Usim, Abuja
In line with the current administration’s mantra of producing what the country consumes and consuming what is produced, the Central Bank of Nigeria (CBN) in October 2021, unveiled the 100 for 100 Policy on Production and Productivity (PPP); an intervention programme targeted at financially fortifying local private companies with bankable projects to fund. They can apply for as much as N5 billion under the scheme and anything above that shall require the special approval of the CBN management.
The programme was also designed to wean Nigeria off massive importation and foreign exchange depletion by bolstering local capacity to meet local demands; create massive jobs, galvanise sustainable economic growth via exports, accelerate structural economic transformation and ultimately promote diversification and productivity.
According to the CBN Governor, Mr Godwin Emefiele, selection criteria for participation are purely based on the businesses’ capacity and capability to swell the nation’s economic fortunes. He added that in selecting the companies, evidence-based, transparent and measurable criteria are deployed and once the apex bank can clearly determine that the private company has a substantial impact on the economy through “Performance Indicators (KPIs)”, it would be picked. Thereafter, the CBN would then screen and finance eligible private sector companies in 100 days, and roll over every 100 days.
The initiative is being funded from the CBN’s Real Sector Support Facility-Differentiated Cash Reserve Requirement (RSSF-DCRR) window and applicants can access it via an online.
The initiative, which would be bank-led, will be rolled over every 100 days (quarterly) with a new set of companies selected for financing under the initiative.
Monthly interests on the facility shall be amortised and transferred quarterly with principal repayments to the CBN. The interest rate under the intervention shall not be more than 5.0% p.a. (all-inclusive) up to 28th February 2022, thereafter, interest on the facility shall revert to 9% p.a. (all-inclusive) effective from 1st March 2022.
So, it was a soothing development on January 31 when 28 selected local firms were unveiled at the CBN headquarters, where they were presented with various banks’ symbolic cheques totalling N23.2 billion.
The money was pooled by seven commercial banks who have keyed into the programme, which among others, seeks to ultimately address the nation’s unemployment nightmare by providing diverse jobs and boosting export in agriculture, healthcare, manufacturing, extractive industries, logistics services, trade-related infrastructure, and renewable energy.
Speaking at the event, the CBN Governor, Mr Godwin Emefiele, explained that under the new scheme, manufacturers in critical sectors that seek to engage in greenfield projects or in expanding their existing facilities will have access to cheaper forms of credit at single digit rates, as well as foreign exchange to procure plants and machineries every 100 days.
“Specifically, for this first cycle of the initiative ending today, 243 applications valued at N321.06 billion, spread over key sectors such as agriculture, energy, healthcare, manufacturing, and services sectors were submitted on the portal. After much engagement, 79 applications were received from banks, valued at N121.87 billion, for projects in six sectors, namely agriculture, energy, healthcare, manufacturing, mining, and services sectors. The requests were carefully screened and scrutinized against a set-out selection criteria, which is categorised into: production efficiency and scalability; local content capacity; job creation and human capital development; operating sector relevance; and potential contribution to economic growth.
“For those seeking to invest in new greenfield or existing brownfield projects, the Bank will continue to provide all the needed support, both in Naira and dollars specifically for the importation of plants and equipment to actualize these investments. It is pertinent to point out that the foreign exchange support will be solely for the importation of spares, plants and equipment needed to increase production capacities of these companies. Let me emphasize that our mission through this initiative is to ensure that priority is accorded to companies who display verifiable progress in our imports substitution and job creation drive. Consequently, we would soon unveil a new FX bidding regime that is market driven and supports companies that accord utmost priority for our local production and job creation drive”, he explained.
Emefiele listed other intervention programmes of CBN to include; N1 trillion Real Sector Facility (RSF), Real Sector Support Facility (RSSF), Anchor Borrowers’ Programme (ABP), Commercial Agriculture Credit Scheme (CACS), Non-Oil Export Stimulation Facility (NESF), and Textile Sector Intervention Facility (TSIF).
“Under the N1 trillion Real Sector Facility, the Bank has released a total of N1.40 trillion to 331 real sector projects in agriculture, manufacturing, mining, and services sectors. Under its Real Sector Support Facility (RSSF), the CBN has disbursed N166.21 billion to 25 projects. In the agricultural sector, the Bank’s Anchor Borrowers’ Programme (ABP) has disbursed N927.94 billion to over 4.5 million smallholder farmers for the cultivation of 21 commodities across the country. Also, the Bank has financed 666 large-scale agricultural projects with the potential of creating an estimated 70,070 direct and indirect jobs under its Commercial Agriculture Credit Scheme (CACS)”, he added.
The CBN Governor appealled to all prospective investors to take advantage of the huge opportunities provided for investment in the real sector under the PPP and approach their banks to submit their applications for participation under the initiative.
In his goodwill message at the event, the Secretary to the Government of the Federation (SGF), Mr Boss Mustapha, who was represented by the Permanent Secretary Ecological Office, Dr Habiba Lawal said the initiative remains germane as it will help eradicate poverty, ensure wealth creation and provide jobs.
He urged the beneficiaries to maximally use the opportunity to breathe fresh air into the economy.
In another goodwill message, the Minister of Labour and Employment, Dr Chris Ngige hailed the CBN for the initiative, even as he admonished recipients to remain highly productive as productivity remains the backbone of the country.
“Without productivity, you lag behind and this initiative is consistent with President Muhammadu Buhari’s plan to lift 100 million Nigerians out of poverty.
“We have no choice than to key into this initiative. We have a youthful population and we must use this to our advantage.
“We have a problem. The youths from 18-40 years are highly unemployed. We can see them join Boko Haram, Avengers, IPOB, etc. They’re jobless. They are doing nothing. We’re sitting on a keg of gunpowder and we need to address this challenge using initiatives like the 100 for 100 policy.
“Again, we’ve not adequately diversified the economy. For a mono economy relying heavily on crude oil receipts, we are still in danger. We know we have the CBN playing several roles but it’s good to keep the economy going. The fiscal and monetary authorities are like Siamese twins. They work together” he explained.
In his remarks, the President Manufacturers Association of Nigeria (MAN), Mr Mansur Ahmed said that the President Muhammadu Buhari’s mantra of ‘producing what we eat and eating what we produce’ was commendable, calling for a multi-stakeholder approach to it succeed.
In his remarks, the Group Managing Director of Access Bank and Head, Body of Bank CEOs, Mr Herbert Wigwe called on banks and other stakeholders to take responsibility in supporting economic development.
“No one will do it for us. The 100 for 100 policy is key because it covers many areas and will increase employment. As banks, we will seek ways to always align with the objectives”, he assured.
One of the beneficiaries of the facility, Mr Adedolapo Adeyemi of Harvest Feed and Agro Processing Limited said the loan would help his company expand its production capacity.
“We are going to buy a machine that will boost production by 60% and create 300 jobs”, he said.
The CBN has promised to monitor the progress of the companies benefitting from the 100 for 100 policy loan to ensure its aims and objectives are fully realised.