By Kelvin Gilbert
The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, earlier in the year, during a visit to the Kaduna Trade Fair and visits to farms across the country used those opportunities to put some of his policies in perspective. Considering past policy failures with regard to the financing of Small and Medium Enterprises (SMEs) as well as the agricultural sector, to most ardent observers, his policies are obviously futuristic in content and will become a success reference point soon may be after he has done his bit and moved on. Those policies will remain significant strands of the Emefiele legacy as a central banker who dared to make a change many consider as positive. On a visit to one of those farms in Edo State benefitting from his intervention, Emefiele asserted that the bank’s infusion of fund in the agricultural sector saved the Nigerian economy at a critical moment and gave a boost to productivity in the sector in the last six years.
At that Trade Fair, he used the opportunity of the business expo to inform Nigerians that farmers received N948 billion while Small and Medium Enterprises (SMEs) and households have so far received N368.79 billion within the period under review. A breakdown of these figures indicates that a total of 4,478,381 smallholder farmers who received N948 billion loans from the Central Bank of Nigeria (CBN) have cultivated 5.2 million hectares of farmland across the country and created 12.5 million direct and indirect jobs. Similarly, CBN has also disbursed N368.79 billion to over 778,000 beneficiaries comprising 648,052 households and about 130,000 Small and Medium Enterprises (SMEs).
Experts analysing the trends in the agricultural sector from November 2015, when the Anchor Borrowers’ Programme (ABP), intended to create a linkage between anchor companies involved in the processing and small holder farmers (SHFs) of the required key agricultural commodities was launched, aver that there is no denying the fact that the level of interest in agriculture had grown exponentially with resounding positive effects on the economy generally. It is pertinent to note that coming up with several initiatives aimed at repositioning the sector, the CBN proved that it can be done. There is evidence on ground to prove that many small holder farmers have been empowered, jobs have been created and invariably the sector has made vital contribution to the expansion and growth of the nation’s Gross Domestic Product (GDP).
While formulating the agriculture policy in the early days of his tenure in office, Emefiele might have been driven by the passion to diversify the economy. But beyond that, he was also encouraged to follow that direction as a way to significantly grow the local economy through a combination of other policies such as Youth Entrepreneurship Development Programme (YEDP); Export Stimulation Facility (ESF); Agri-business/Small and Medium Enterprises Investment Scheme (AGSMEIS), Paddy Aggregation Scheme (PAS); Accelerated Agricultural Development Scheme (AADS) which gave a boost to the income levels and financial capacity of local farmers. Furthermore, the Tertiary Institutions Entrepreneurship Scheme (TIES) is a policy designed to unleash the potential of graduate entrepreneurs (gradpreneurs) by providing re-orientation, training, and innovative financing model that will enhance entrepreneurship.
The broad objective of the 100 for 100 policy on production and productivity (PPP) is to boost production and productivity, necessary to transform and jumpstart the productive base of the Nigerian economy. It is also expected that the initiative will reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right companies and projects with potentials to immediately transform and kick-start the productive base of the economy. About N23.20 billion has been disbursed to the first set of 28 beneficiaries comprising 14 in the manufacturing sector, 12 in the agricultural sector and two in the healthcare sector. The use of instruments such as the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL); Real Sector Support Facility (RSSF); The Nigeria Electricity Market Stabilization Facility (NEMSF); Entrepreneurship Development Centres (EDCs) incentivized operators in the sectors in a significant way.
The CBN, by consistently drawing attention to the effect of its policies on the economy, is trying to remind not just political actors but also operators in the business environment that with focus and commitment much can be achieved to the benefit of the nation in general. It is also appropriate to observe that the dedication brought to bear on the implementation of these policies helped in no small measure in revamping the economy with agriculture shifting from a way of life where people practice it for sustenance to a business enterprise that is generating employment opportunities in quantum not to mention economic empowerment to the local people who now see themselves as key players in the drive to add value to primary products.
Before the policy shift of the Emefiele administration, Nigeria spent a huge sum on the importation of food items that could be produced locally. At the peak of that jamboree, N1 trillion was recorded as importation bill which obviously was not sustainable. His intervention through a well-designed financial support has helped to increase the contribution of the agriculture sector, in particular, to the nation’s Gross Domestic Product (GDP). According to data from the Nigeria Bureau of Statistics, NBS, agriculture sector’s contribution to GDP rose to 22.35 per cent in Q1’21, from 19.79 per cent in 20215. Most notable is the 2.2 per cent real growth recorded by the agriculture sector in 2020, when the economy as a whole contracted by 1.92 per cent. Significant in this regard is the 3.4 per cent real growth recorded by the sector in Q4’2020, the highest growth since 2017.
Gilbert is an Abuja-based economist