By Jennifer Michael
It is already a known fact that the outbreak of the Coronavirus (COVID-19) which later became a pandemic hit the world like a tsunami. Countries responded to its devastating effects in ways that were peculiar to their own circumstances. Around the world, nations moved away from multilateralism and responded by fighting for themselves with several measures to protect their own people and economies, regardless of the spill over effects on the rest of the world. Nigeria was not an exception as the Governor of Central bank of Nigeria (CBN), Mr Godwin Emefiele, inspired a response mechanism that motivated and propelled activities in all sectors towards managing a crisis that is deadly in its immensity.
Even at that, Emefiele, seemingly, was not fazed by the pandemic as he noted that “although these developments are troubling, they present a clear opportunity to re-echo a persistent message the Central Bank of Nigeria (CBN) has been sending for a long time, and at this time even more urgently so.” In other words, for him, the pandemic, as frightening as it was, presented Nigeria with an opportunity to reassess its development strategies and redirect them on a path that will ensure the realisation of her aspirations as a nation.
He further said that “we must look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for our people. For a country of over 200 million people, and projected to be about 450 million in a few decades, we can no longer ignore repeated warnings about the dangers that lie ahead if we do not begin to depend largely on what we produce locally. The security and wellbeing of our nation is contingent on building a well-diversified and inclusive productive economy.”
As at the time Emefiele proactively commenced an economic re-engineering process in the country that eventually helped Nigeria absorb the shock of the pandemic, his critics saw him as a man not too sure of what his job schedule was as the nation’s number one banker. But with the dramatic entrance of COVID-19, all those rabble-rousing proclivities are now in the past as his policies continue to impact positively on the economy.
In such areas like agriculture, the intervention of CBN was, without mincing words, prophetic, if not messianic. With food supply not severely threatened, it was easier to manage the other side effects of the pandemic. The CBN also deployed monetary policy measures such as reduction of customs duty and customs audits just as they were not officially announced and the skilful management of the foreign exchange regime.
It was in that context that Emefiele introduced some economic stimulus measures that ultimately prevented business collapse and ensured that there was sufficient liquidity to tide the country over the crisis while scientists endeavoured to find ways of medically addressing the health issues raise by the virus.
The Bank introduced the use of labour intensive methods to retain or create jobs in key economic areas, undertake jobs that enhance growth and create infrastructural investments in roads, bridges, solar power, and communication technologies, promote manufacturing and local productions at all levels and curb unnecessary demand for foreign exchange to stem the pressure on exchange rate while at the same time protecting the very poor and most vulnerable through pro-poor spending.
The Central Bank of Nigeria injected a N50 billion stimulus package intended to reactivate direct labour in national infrastructure projects to create jobs for youths in relevant priority sectors. It also launched a programme to create jobs in digital outsourcing.
There was also a N60 billion fund package designed to create 296,000 jobs in the construction and rehabilitation of roads in the six geo-political zones of the country through the use of local resources as well as N90 billion for the launch of a national programme to promote domestic use of compressed natural gas (CNG) and support the creation of one million jobs in the process.
Similarly, the CBN injected N23.4 billion into the economy to support the creation of one million jobs through the conversion of 30 million homes from dirty fuels (kerosene, charcoal and diesel) to liquefied petroleum gas (LPG) and achieve emissions reduction in greenhouse gases while also applying LPG in other sectors such as agriculture, power generation, transport, industry and technology.
Still, it was obvious that the nation needed capital from the private and public sectors to support infrastructure investment that will have a multiplier effect on growth across critical sectors. As important as this was, the situation was not helped by the decline in revenues due to federal and state governments.
Therefore, it became inevitable that additional and alternative ways of funding infrastructure have to be devised so as to generate and sustain the growth of the nation’s economy. There is no gain saying it that a well-built infrastructure system can and do have a multiplier effect on growth by enabling the expansion of business activities in the desired direction. Most investors, foreign and local see infrastructure as key in the consideration of factors likely to influence their investment decisions one way or the other. The availability of infrastructure, mostly, that is to say, roads, power, water and so on are what differentiates between developed economies and developing ones. That are the key determinants in the assessment of the ability of a nation to create wealth and improve on its human development index.
It was to achieve this important goal the CBN initiated and got the necessary presidential approvals and support to establish the Infrastructure Corporation of Nigeria Limited. InfraCorp, as it is known, will be co-owned by the CBN, the African Finance Corporation and the Nigerian Sovereign Investment Authority (NSIA) and would become fully operational by the second quarter of this year 2021. It is expected that this vehicle would enable the use of private and public capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.
InfraCorp will be a world class infrastructure development vehicle, wholly focused on Nigeria, with combined debt and equity take-off capital of N15 trillion, and managed by an independent infrastructure fund manager. This fund will be utilized to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets, as envisaged at the CBN Going for Growth Roundtable in March 2020.
Michael, a public affairs analyst, writes from Yola