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Tag: Godwin Emefiele

  • Court to hear contempt proceedings against Emefiele on June 13

    An FCT High Court in Kubwa has fixed June 13, to hear contempt proceedings against the CBN Governor, Godwin Emefiele, to enable the applicant, Godwin Emmanuel respond to a motion on notice served on him.

    Justice Bello Kawu fixed the date after Emmanuel’s counsel, Maxwell Okpara and the CBN Governor’s counsel, Nasir Dangiri, SAN, greed to adjourn the matter for their motions to be heard.

    Okpara had told the court that he was served a motion by Dangiri  on April 16 at close of work adding that he had seven days to respond to it.

    Kawu had earlier read a letter sent by the judgement debtor, Unity Bank asking for the court to stand down the proceeding in the interest of justice to enable them conclude their processes to bring to the court to represent her interest in the matter.

    Read Also: My tenure ends in June, says Emefiele

    The News Agency of Nigeria recalls that Okpara, on behalf of his client Emmanuel filed a contempt proceeding against the CBN governor on April 4 for disobeying  a court order to pay Emmanuel N52.5 million.

    The court gave an order for substituted service on the CBN Governor on the matter on April 10 as efforts made to serve him personally proved abortive.

    Okpara said judgement was given against Unity Bank to pay the said sum to Emmanuel by an FCT High Court, Gwagwalada sometime in 2015.

    He however applied for a garnishee proceeding against CBN in 2017 which was granted and Unity Bank did not appeal against the judgment.

    NAN

  • Emefiele woos investors, says Nigeria ready for business

    The Central Bank of Nigeria (CBN) has assured investors and the international community that the country having gone through a successful election, was ready for investments.

    The CBN Governor, Mr Godwin Emefiele, on Friday night in Washington DC, held an informal meeting with potential investors where he enticed them with the Nigerian success stories, especially in agriculture.

    Emefiele said that the Anchor Borrowers Programme, which targets local farmers was one of the major achievements of the bank under its development interventions.

    “As at December 2018, a total sum of N178.48 billion had been disbursed through 19 participating financial institutions to 902,518 farmers.

    “During the period, over 2.8 million and 8.4 million direct and indirect jobs were created under the Anchor Borrowers Programme,” he said.

    On the country’s foreign exchange policy, Emefiele said that the focus had always been to ensure price stability.

    He highlighted some of the foreign exchange reforms undertaken by the bank, which included the ban of the 41 items, the establishment of the investor’s and export’s window and the SME Window of the foreign exchange market.

    According to him, this resulted in stable exchange rate, foreign exchange liquidity, vibrancy in the capital market, improved supply of foreign exchange supply with positive impact on GDP growth.

    Emefiele said also that Nigeria, through its financial inclusion strategy had recorded a lot of progress in giving its adult population access to a broad range of formal financial services at an affordable cost.

    According to him, statistics shows that in Nigeria today, the number of adult with access to financial services has grown from 58.4 per cent in 2016 to 63.2 per cent in 2018.

    “A lot of work has been done and indeed a lot of work needs to be done but in the midst of this, we are saying that Nigeria is open for business and foreign investors.

    “As the monetary and fiscal authority continue to work tirelessly to boost our economy, it is important to portray some of Nigeria’s enduring strength which offers significant reward for current and prospective foreign investors.

    “I want you to know that irrespective of the impact of the recession, Nigeria’s economy remains the largest in Africa by the size of its GDP with diversified opportunities across different sectors.

    “These sectors include ICT, manufacturing, solid minerals, trade and agriculture,” he said.

    Emefiele assured potential investors of the safety of their investments should they choose to take a leap of faith and make a mutually beneficial investment in the country.

  • CBN governor, AGF to appear before Reps over N33b pension fund remittance

    The Governor of Central Bank (CBN), Godwin Emefiele and the Accountant-General of the Federation (AGF), Ahmed Idris are to appear before the House of Representatives on Tuesday.

    The duo are to clarify alleged remittance of N33b pension deductions to the Federal government by PenCom before the House of Representatives ad hoc Committee investigating alleged irregularities in National Pensions Commission (PenCom)

    According to the Chairman of the Committee, Johnson Agbonayinma said noticeable discrepancies in the pension deductions claimed to have remitted by the Acting Director-General (DG) of PenCom, Aisha Dahir-Umar made the appearance of the two critical to the investigation.

    While appearing before the Committee at the public hearing yesterday, the Nigerian Union of Contributory Pensioners (NUCP) indicted PenCom and Pension Fund Administrators (PFAs) of several infringements.

    In its presentation, the group regretted that the new pension scheme has compounded, rather than alleviating problems faced by retirees under the Contributory Pension Scheme.

    U.C. Ekpo and Emezuru Eugene signed the memorandum where PenCom was accused of failing to review contributors’ pension every five years as provided in Section 173 (3) of the 1999 Constitution (as amended).

    Read Also: CBN submits 2019 budget proposal to parliament

    The Union also observed persistent delays in payment of retirees’ benefits to over two years as well as lack of standardized template and transparency in computation of lump sums paid after retirement.

    PenCom was also faulted for gender inequality in the payment of lump sums in contravention of the Pension Reform Act.

    While calling on PenCom to confine itself to its functions as a regulator rather than meddling in the union’s activities, the Union noted that “It appeared the essence of the new pension scheme is to create capital for the Pension Fund Administrators (PFA) to maximize profits and enrich themselves.

    “Worse still, PenCom, which is empowered to strictly enforce the Pension Reform Act in regulating the activities of PFAs and Pension Custodians, has become a violator of the same Act in many ways.

    “The sum total of anomalies and injustices perpetrated by PenCom in its implementation of the Contributory Pension Scheme leads to suffering, pain and premature death of pensioners in Nigeria.”

  • Slashing the MPR rate

    The March 26 decision by the monetary authorities, to slash the Monetary Policy Rate (MPR), from 14 per cent to 13.5 per cent, though long overdue, could not have come at a better time, considering the steady progress recorded since the economy exited the recession in the second quarter of 2017.  The Monetary Policy Committee (MPC) had, vide its communique, stated that ”the committee was convinced that doing this will further uphold the banks’ commitment to promoting strong growth by way of encouraging credit flow to the productive sectors of the economy”.

    Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, was even more succinct when, in the course of his parley with the media shortly after, observed: “Having been on this path, particularly the MPR at about 14 per cent since July 2016, and with the relative stability we have seen in the macro-economic variables over the last two to two-and-a-half years, we just think that this should be the next phase, where we begin to think about consolidating growth. This should be the next phase where you should be talking about how do we create more jobs and reduce the level of unemployment in our country for people”.

    He noted that the decision merely followed the path already charted by the banks, majority of which have started dropping the interest rate marginally. Said Emefiele: “I will say that we are following them (the banks). That is why we say that we are signalling. We are signalling in the sense that with time this will permeate the entire banking sector and people will begin to see the expected impact.”

    The issue of high MPR, as indeed of high-interest rates as a whole, is certainly an old problem. Signalling or not, we have certainly come a long way from when Kaduna State Governor, Nasir el-Rufai, took the extremist view of not only faulting the decision of the CBN to hike the MPR from 12 per cent to 14 per cent, but went as far as to suggest that the government reduce same through legislation.

    Unquestionably, the CBN has done an admirably good job of steadying the economy in the last two years. Presently, headline inflation has climbed down from 18.6% then to 11.3 per cent; so also has the nation’s foreign reserves moved up from $23.69 billion to $45 billion. As against the volatility of yore, exchange rates in all the markets has since converged around N358 – 360/$1 just as the positive GDP growth trajectory has been consistent for about five quarters.

    The obverse side of the equation – unfortunately – is that growth has remained not only sub-par but fragile; unemployment and its companion, poverty, have also soared. To this we add the old, but intractable problems of high cost of funds and access to credit by small and medium scale enterprises. This is why the slashing of banks’ reference lending rate, no matter how tokenistic or symbolic it appears at this time, not only finds great merit but is actually a welcome development, as it comes with expectations of reductions in the cost of borrowing at least in the long run.

    Yet, there is a sense in which one needs to be cautiously optimistic about what the signal forebodes. To be sure, nothing of the fundamentals has changed. In other words, nothing as far as we can see is guaranteed.

    For instance, retaining the asymmetric corridor of +200/-500 around the MPR, the cash reserves ratio (CRR) at 22.5 per cent, and liquidity ratio at 30 per cent, still panders, largely, to the traditional obsession with liquidity tightening and inflation targeting. It says nothing about the problem of unbridled public sector spending, which gave rise to these measures in the first place. Would the MPC go back to the default mode of monetary tightening, should things change overnight as they could?

    And how about the moral dilemma of routinely visiting the ‘sins’ of unrestrained public sector spending on the private sector – supposedly the drivers of the economy – through punitive cycles of monetary tightening?

    Nonetheless, we welcome the cut particularly if it heralds a new dawn of progressively lower interest rates. With the apex pulling all the stops at deepening and diversifying the economy, an approach less yoked to inflation fighting with singular focus on growth and job creation would seem the natural order of things. To us, it is the least course for the apex bank to pursue at this time.

     

  • How rise in inflation may affect Nigerians

    The Central Bank of Nigeria, which is the apex regulatory body of banks recently expressed fears that inflation rate may rise marginally into the second quarter fueling fears in some quarters that the economy may take the hit.  Ibrahim Apekhade Yusuf in this report examines the issues

    To the discerning mind, the buzzword ‘inflation’ has both its merits and demerits. But when the top echelons of the economic managers, especially the CBN governor, Godwin Emefiele brood over this subject then it becomes something that should be taken seriously.

    Nigeria’s inflation rate is expected to rise for the rest of this year till mid-2019, said governor of the Central Bank of Nigeria, Mr. Godwin Emefiele.

    According to him, despite this gloomy picture, the short-term outlook of the Nigerian economy remains good. Emefiele disclosed this at the bankers’ dinner in Lagos in his speech entitled Strengthening the Economic Recovery Process in Nigeria, peered into his crystal ball and told Nigerians what to expect in 2019.

    “We expect that monetary policy stance will remain judicious, research-driven, adequate and supportive of the real economy subject to underlying fundamentals. The current tight stance is expected to continue in the near-term, especially in view of rising inflation expectations and exchange market pressures. Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilization,” he assured.

    Echoing similar sentiments, Chika Mordi, Chairman, United Capital Plc while analysing the results of the company’s performance for the 2018 financial year ended in March 2019, argued matter-of-factly that “the headline inflation rate moderated significantly to settle at 11.4% in December 2018 relative to 15.2% in January 2018.”

    Investigation by The Nation revealed that inflation rate in Nigeria averaged 12.46 percent from 1996 until 2019.

    Nigeria inflation rate

    Available information obtained from the Nigeria Bureau of Statistics shows that the nation’s inflation rate was last updated on March of 2019.

    According to the NBS, in Nigeria, the Consumer Price Index (CPI) measures the change over time in prices of 740 goods and services consumed by people for day-to-day living. The index weights are based on expenditures of both urban and rural households in the 36 states. The most important categories in the CPI are Food and Non Alcoholic Beverages (51.8 percent of total weight); Housing, Water, Electricity, Gas and Other Fuel (16.7 percent) and Clothing and Footwear (7.7 percent). Transports account for 6.5 percent of total index and Furnishings and Household Equipment Maintenance for 5 percent. Education represents 3.9 percent of total weight, Health 3 percent, Miscellaneous Goods and Services 1.7 percent and Restaurants and Hotels 1.2 percent. Alcoholic Beverages, Tobacco and Kola account for 1.1 percent of total index, Communications for 0.7 percent and Recreation and Culture for the remaining 0.7 percent.

    According to the NBS, Nigeria’s annual inflation rate dropped to 11.31 percent in February 2019 from 11.37 percent in the previous month, as prices rose at a slower pace for all categories.

    Food inflation fell to 13.47 percent in February from 13.51 percent in the previous month. In addition, prices rose at a softer pace for: housing & utilities (7.24 percent vs 7.35 percent); clothing & footwear (10.08 percent vs 10.14 percent); transport (9.57 percent vs 9.80 percent); furnishings & household equipment maintenance (9.59 percent vs 9.70 percent); education (9.64 percent vs 9.70 percent); health (9.69 percent vs 9.81 percent); miscellaneous goods & services (9.25 percent vs 9.40 percent); restaurants & hotels (9.04 percent vs 9.20 percent); recreation & culture (8.66 percent vs 8.71 percent); and communication (7.43 percent vs 7.48 percent). Annual core inflation, which excludes price of volatile agricultural products, edged down to 9.8 percent in February from 9.9 percent in January. On a monthly basis, consumer prices went up 0.7 percent, the same pace as in January.

    What rising inflation means

    According to Investopedia, “Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. Often expressed as a percentage, inflation indicates a decrease in the purchasing power of a nation’s currency.”

    Many economists, businessmen, and politicians maintain that moderate inflation levels are needed to drive consumption—operating under the larger, overarching assumption that higher levels of spending are crucial for economic growth.

    However, according to economic analysts, the rise in inflation whether marginal or substantial has adverse implication for the economy in terms of value money. Inflation arises when prices rise for energy, food, commodities, and other goods and services, the entire economy is affected. Rising prices, known as inflation, impact the cost of living, the cost of doing business, borrowing money, mortgages, corporate and government bond yields, and every other facet of the economy. When inflation is too high of course, it is not good for the economy or individuals. Inflation will always reduce the value of money, unless interest rates are higher than inflation. And the higher inflation gets, the less chance there is that savers will see any real return on their money.

    Fears of rising inflation

    However in the view of Adewunmi Hamed Adewale, an accountant with the Association of Bureaux De Change Operators of Nigeria, the fears over spike in inflation rate may not be unfounded. What needs to be done, he stressed, is for the government to be proactive rather than resign itself to fate.

    Speaking with our correspondent recently, the ABCON boss said, “The issue on spike on rates is all based on projections the organ of government is looking at. Every indices of government in a way come in form of projections. And whatever projections the government is looking at to be able to inform. Every government wants a situation whereby the financial system needs to be a stable system and every reasonable government and every economy would a situation whereby the foreign exchange rate would be as stable as you can find such that investors can be able to predict the FX rates. We don’t pray for any spike that would further inflate the rate more than we the current situation. So we don’t pray for such. Because when there is a stable FX rate, every other aspects of the economy would be able to thrive very well. And you must realise that our economy is one that revolves round FX by the nature of the activities we operate in. and we should be able to and that’s the more reason why we must work towards the goal of this current administration which is saying let’s grow what we eat and let’s eat what we grow. So if there is a shift of focus from importation, the FX rate would be stable. If we are producing what we eat, in terms of local content development and we are not going to be dependent on importation. And there are some basic things

    Quick wins

    What the government can do as a matter of urgency, Adewale stressed, “is to drive the process of getting our infrastructure working. For instance, if power is put in place and its gets stable that would really help the local producers very well. If there is good power supply, definitely most local producers would not depend on powering their plants with generators and expending much money on overheads and all other production cost. So we can start from power. Let that be done. Let the government also fix our roads so that produce or products can be conveyed seamlessly from one location to the other. Things being produced in the north should be able to get to the south without much hassle and vice versa.”

    Like Adewale, Chinedu Bosah, a public affairs commentator said, “if there is the use for FX for importation of things like took pick, juices and what have you, then our FX rate can be more stable and ultimately our currency.  And the spike being envisaged may not really happen at the end of the day provided thee is sustainability in the level of local production and local content development. And with that we will all be happy for it and even the investors would be happy to say yes, our rate is stable let come and invest. Any reasonable investor wants to see a business environment that is stable including stability in rates, stability in policies, and even the polity itself.”

    CBN’s interventions

    Perhaps in its quest to rein in the adverse effects of rise in inflation figures, the CBN decided to cut its benchmark interest rate by 50 bps to 13.5% on March 26th 2019, mainly to stimulate the economy. The move surprised markets who had expected the rate to remain steady at 14% and marks the first rate cut since November 2015. Six out of the eleven members of the monetary policy committee voted to reduce the current monetary stance. In February 2019, the annual inflation edged down to 11.3% from 11.4% in January, but still above the Bank’s target of 6-9%. Policymakers added that the economy is projected to grow between 2.7% and 3% in 2019.

     

  • Obaseki makes case for NIFOR’s revival

    Edo State Governor, Mr. Godwin Obaseki, has made a case for the revival of the Nigerian Institute of Oil Palm Research (NIFOR) to strengthen the country’s capacity to produce quality, high-yielding seedlings and boost oil palm production.

    The governor made the case during a meeting in Abuja between Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele and governors of states in oil palm production belt of the country.

    He said the revival of NIFOR will improve investment in research and production of quality oil palm seeds.

    Noting that the state government has extended support to oil palm production companies in the state to boost production, Obaseki said Edo State was currently cultivating oil palm on about 70,000 hectares of land.

    On his part, the CBN governor said that the country intends to become the third largest producer of oil palm in the world ahead of Thailand and Columbia, and would extend support to states to realise the plan.

    READ ALSO: College of Agric Iguoriakhi: 48 students commence internship at NIFOR

    According to him, “As some of you may know, the usual life cycle for optimum palm production is 25 years. If we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne and an assumed production level of 16 million tonnes, Nigeria could have generated close to $10 billion worth of foreign exchange from palm oil.”

    “This analysis does not take into consideration the amount of jobs that could have been created in our rural communities from large scale and small holder developments,” he explained.

    He said the CBN’s package to ensure Nigeria records accelerated jump in oil palm production include using part of the bank’s Anchor Borrower Programme (ABP), to grant loans at nine per cent interest rate and work with off-takers.

    “On our part, the ABP and our Commercial Agriculture Credit Scheme (the CBN will work with large corporate stakeholders and small-holder farmers to ensure availability of quality seeds for this year’s planting season and agro-chemicals in order to enable improved cultivation of oil palm,” he said.

  • CBN vows to make Nigeria world’s third palm oil producer

    The Central Bank of Nigeria (CBN) has vowed to help push Nigeria to the world’s third largest producer of palm oil.

    If successful, Nigeria will overtake Thailand and Columbia as a major palm oil producer in the world.

    Addressing stakeholders in the palm oil industry in Abuja Monday, the Governor of the CBN Mr. Godwin Emefiele stated that “our ultimate vision is to overtake Thailand and Columbia to become the 3rd largest producer over the next few years.”

    The CBN Governor noted that “if we had kept pace with our peers in supporting improved cultivation of palm oil, at the current global market price of $600 per tonne, and an assumed production level of 16m tonnes, Nigeria could have generated close to $10bn worth of foreign exchange for the country. This analysis does not take into consideration the amount of jobs that could have been created in our rural communities from large scale small holder developments.”

    To achieve this, the CBN Governor is advocating for improved financing.

    According to him, “with regards to improving access to finance for small holder farmers focused on cultivation of palm oil, the Bankers Committee had established a special sub-committee to make recommendations on sustainable financing models for oil palm and four other critical agricultural commodities that include cocoa, sesame seed, shear-butter, animal husbandry and cashew.”

    Read Also: CBN, EFCC tackle economic crimes

    He added that as part of the Anchor Borrowers Program (ABP) and our Commercial Agriculture Credit Scheme (CACS), “the CBN will work with large corporate stakeholders and small holder farmers to ensure availability of quality seeds for this year’s planting season and agro-chemicals in order to enable improved cultivation of palm oil. We will also work to encourage viable off taker agreements between farmers and large-scale palm producing companies.”

    Thereafter he disclosed that “loans will be granted through our ABP and CACS programs at no more than 9% p.a to identified core borrowers.”

    Emefiele noted that “with an estimated 3 million hectares of land under cultivation, abundance of suitable arable land, we need the cooperation of our state Governments in the oil palm producing zones to make land available to investors with proven financial and technical capabilities, who will be able to support developments of large scale palm oil plantations in the country.”

    He then announced that all the states in the South-South and South-East regions have agreed to provide at least 100,000 hectares each for the initiative. This program is also expected to accommodate the small holder farmers.

    Monday’s meeting was enlarged to include Executive Governors and other top government functionaries from the oil palm producing states to elicit their buy-in and set a partnership model that would, with immediate effect, stimulate investments in the palm oil plantations, such that within the next 3-5 years, the global share of the country’s oil palm production would more than double.

    Emefiele lamented that “despite placing oil palm in the forex exclusion list, official figures indicate that importation of palm oil had declined by about 40 per cent from the peak of 506,000 MTs in 2014 to 302,000 MT in 2017. This indicates that Nigeria still expends close to $500 million on oil palm importation annually and we are determined to change this narrative.”

    “We intend to support improved production of palm oil to meet not only the domestic needs of the market, but to also increase our exports in order to improve our forex earnings” he said.

    Despite the availability of over 3m hectares of farmland for palm oil cultivation, production remains low at close to 2 tonnes per hectare, relative to a global benchmark of 25 tonnes per hectare. This is as a result of the maturation of existing palm trees, as some of these trees were planted in the 50s, as well as low investment in replanting high yielding palm oil seeds.

    Also speaking at the event, the Edo state Governor Mr. Godwin Obaseki cautioned that stakeholders to the oil palm initiative should “develop very clear plan of achieving the set objectives.”

    He also spoke on the need to revive the moribund oil palm research Institute and more investment in research and production of quality oil palm seeds.

    According to him, “we should understand that for meaningful investment to come into the oil palm industry, we have to think of other incentives, to encourage manufacturers to turn oil palm to other things.

    “What I mean is that palm oil can be used to manufacture margarine, soap, toothpaste and other things that require oil palm.

    “So we must also think about how to create incentives for those who are currently in the business to exploit all the uses of palm oil to create job opportunities for our people,” he said.

     

  • CBN bans sale of forex to textile importers

    The Central Bank of Nigerian ( CBN ) has moved to revive Nigeria’s moribund textile and clothing industry with foreign exchange restrictions on importers of textiles and clothing materials.

    Speaking at the at the Textile Industry stakeholders Meeting in Abuja on Tuesday, the CBN Governor, Mr. Godwin Emefiele announced that the apex bank has decided to implement a few steps that will support the revival of the textile sectors.

    These steps he said include; financial support to textile manufacturers with the provision of funds at single digits rate, to refit, retool and upgrade their factories in order to produce high-quality textile materials for the local and export market.

    “Effective immediately, the CBN hereby place the access to FX for all forms of textile materials on the FX restriction list. Accordingly, all FX dealers in Nigeria are to desist from granting any importer of textile material access to FX in the Nigerian Foreign exchange market.”

    In addition, the CBN he said “shall adopt a range of other Strategies that will make it difficult for recalcitrant smugglers to operate banking business in Nigeria. The details of those strategies will be unfolded in due course.”

    Also the CBN “shall, initially support the importation of cotton lint for use in textile factories, with a caveat that such importers shall begin sourcing all their cotton needs locally beginning from year 2020.”

    As part of its Anchor Borrowers Program, the CBN he said will support local growers of cotton to enable them meet the needs of the textile industries in Nigeria. To this end, the CBN “shall also support efforts to source high yield cotton seedlings so as to ensure the yields from our cotton farmers meet global benchmarks.”

    As regards provision of stable electricity, the CBN has also offered to support the creation textile production centers in certain designated areas in Nigeria where access to electricity shall be guaranteed.

    Emefiele noted that in 2016, the CBN began discussions with the Kano and Kaduna State Governments to establish textile industrial areas in a bid to guarantee stable electricity in those industrial areas. “We would intensify efforts with these governments and others that may show keen interest to see to the quick actualization of such programmes.

    On the FX restrictions specifically which will take effect from today, Emefiele insisted that “banks or FX authorized dealers are prohibited from granting or selling Forex to anybody who wants to import textiles, clothing, textile materials whether through valid and non-valid, I would just advice that there is no need for anybody to talk about whether it is valid or non-valid format we need to close it.”

    “Once we close it, it will make it difficult for them to import those garments into Nigeria so that all those garments that are sitting in the factories, the people will be forced to go and buy them whether the price is right or not they will be forced to buy them and the fact that they are forced to buy, they create opportunities for more people to go into that business and over time the price will stabilize that is the idea.”

    He said talked about 2020 because “I felt that the cotton association talked about time from planting to harvesting cotton and whether it will be in the kind of quantity that you may need and the rest so that is why we are saying for now subject to speaking to these stakeholders behind closed doors, we may say ‘you can import your cotton that is needed by the industry to gin and then convert into their textiles on the condition that by 2020 this will stop in which case our farmers would have gotten into the rhythm to produce the cotton that we need for our textile production.”

    These measures the CBN governor said “will discourage smuggling, resuscitate this critical industry, and support efforts at creating jobs for Nigerians.”

    The CBN was moved to take these critical steps to save the textile industry because according to Emefiele, “today, Nigeria currently spends above $4 billion annually on imported textiles and ready-made clothing. With a projected population of over 180 million Nigerians, the needs of the domestic market are huge and varied, with immense prospects, not only for job creation, but also for growth of the domestic textile industries.”

    One example that highlights the potential of this local market, he pointed out includes “the need to support provision of uniforms and clothing apparels for school students, military and paramilitary officers as well as workers in the industrial sector. In addition, when we consider the amount spent on outfits for religious and social events such as weddings, naming and funeral ceremonies on a weekly basis, the potential market size is well over $10 billion annually.”

    Emefiele told the textile industry stakeholders that the CBN is ready “to change this narrative today. I believe that if the CBN along with other critical stakeholders are able to address some of the challenges facing this key industry, given the high domestic demand for textiles, we will be able to create jobs for our economy, while increasing production of textiles in Nigeria.”

    During the interactive session with journalists and textile industry stakeholders, the CBN governor assured the group from the mining sector of the industry as well as textile groups generally that “regarding the loans from the Bank of Industries (BoI), we will be engaging the BoI, a substantial portion of the loans that they have lent out to you are our own Central Bank interventions so we will be talking to see how these loans can be properly restructured so that you now have a new beginning.”

    He said he was “optimistic that they will agree for the restructuring given the attempts we are now making to get this industry back to life. Once this is done I believe you shouldn’t have any problems about restructuring the facility.”

    Emefiele also assured the cotton and textile stakeholders that “before the planting in May we would have gone round and made funds available because we have development finance officers in all CBN branches and we have an anchor borrowers template for recognizing genuine farmers to access the funds under the auspices of the association recognized cotton farmers not just anybody who will just come to take money and not pay we want people who genuinely are farmers who genuinely want to go into cotton farming business so that they can help to produce the badly needed raw materials for the textile mills to produce.”

    With regards to textile factories that have stockpiles of inventories flooding their warehouses and storage facilities, the CBN helmsman said the CBN “will make things difficult for those things to come in, don’t worry, in our closed door session we will talk about dealing with smuggling and you know the Central Bank does not carry guns or arms we do not have lorries to be at the border post, but we know what we will do to make it difficult for those smugglers to bring those things into Nigeria and we will unfold those things to you so when we make life difficult for them to smuggle this items into the country what does that do, it opens the market for you so that those who would have gone to buy those smuggled or imported goods will be forced to come to the Nigerian. That is one immediate economic solution that I can see and since the president has signed an executive order that will now compel everybody flow in your direction.”

    In his address, President of National Cotton Association of Nigeria Mr. Anibe Achimugu expressed delight that the CBN’s latest offensive against textile smuggling and desire to revive the textile industry now signals “better days are ahead of us under the anchor borrowers’ project for members of Cotton and Textile Group (CTG).

    He said members of the group were grateful “for the points the CBN governor highlighted in terms of the CBN interventions but want to appeal to the governor that in as much as we have started the journey of the anchor borrowers programme, time is of essence, what has been happening in the past is that we have been missing our planting seasons. We are urging (of course we have our own work as well) that at least within this month we will get the approval that we are seeking under the anchor borrower programme for cotton production to fast track the process of planting and training members.

  • Financing agriculture

    •It is time to simplify for better result

    At the annual bankers’ dinner last December, Central Bank of Nigeria (CBN) governor Godwin Emefiele let out an update on the flagship agricultural credit initiative of the Muhammadu Buhari administration, the Anchor Borrowers Scheme (ABS) launched in 2015. Under the scheme, small holder farmers are supplied farm inputs in kind and cash (for farm labour), to boost production of the identified commodities and consequently to stabilise inputs supply to agro-processors at a moderate interest rate of nine percent per annum.

    According to Emefiele, “As at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, have so far benefited from the anchor borrowers programme, which has generated over 2.5 million jobs across the country”. Enthused by the success of the scheme, the Monetary Policy Committee, he stated, had in its meeting of November  21, 2018, recommended the inclusion of palm oil, tomatoes, and fisheries to mention a few, in the scheme. In all, N160 billion is said to have been disbursed under the programme till date.

    Last week, The Punch reported that the Commercial Agriculture Credit Scheme (CACS) – another initiative of the apex bank, had as at November 19, 2018, granted a total credit of N596.44billion covering a total of 576 projects, of which 34 are in respect of state governments. When added to the billions annually disbursed to farmers under the Agriculture Credit Guarantee Scheme (ACGS), also promoted by the apex bank – a programme designed to provide guarantees on loans granted by banks to farmers for agricultural production and agro-allied processing – they certainly reflect not just the priority of the Federal Government, but the pivotal role being played by the apex bank in providing scarce credit on such terms that are increasingly reasonable and competitive to the Nigerian farmer.

    Yet, it is tempting – at another plain – to see the development as another familiar Nigerian pastime of throwing cash at fundamental problems. An immediate concern is whether the apex bank, by the sheer number of initiatives already in place, is not actually biting off more than it can chew, or as it is increasingly proving to be, a case of simply putting new wines in old wineskins.

    Yes, we agree that the sector needs as much credit as the system can afford. Not only that, we also agree that the apex bank has a crucial role to play in catalysing the flow of credit to the sector. What is debatable is the overall usefulness of the multiplicity of related schemes in an environment where other basic factors necessary to guarantee success of the programmes are more often than not, unavailable. But even more important is whether a number of these activities could not have been better shouldered by the bank established precisely for this purpose – the Bank of Agriculture.

    So, while a lot has been said of how lack of investment has hobbled the development of strategic linkages in the agricultural value chain, from transportation to storage, preservation and marketing, Nigerians cannot but wonder whether the way forward is to have multiple but disparate programmes to address the different aspects of the same problems.

    Which of course takes us to another level – the question of whether adequate mechanisms currently exist to coordinate and evaluate the impact of the various initiatives. Here, we see the update by the apex bank on the performance of the ABS as only the starting point. Not only do we expect such routine updates on the ACGS and the CACS, it seems about time the Federal Government put an independent coordinating body in place to monitor the impact of the various intervention programmes being undertaken by the apex bank, particularly in the agricultural sector.

    That way, it would be easier to determine which of the initiatives are measuring up to their objectives and those that are not, to enable government make appropriate policy interventions.

     

  • ‘Emefiele still in office’

    The Central Bank of Nigeria (CBN) has dismissed claims that its Governor, Godwin Emefiele has been sacked.

    Responding to enquiries from The Nation yesterday on the purported sack of the CBN chief by an online medium, its Director, Corporate Communications, Isaac Okorafor, said nothing can be farther from the truth. “The governor is in his office working.”

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    Another CBN official said:  “There is nothing like that, the governor is here, his tenure expires in June. In fact he has functions to attend to tomorrow, one of which is to meet with stakeholders in the cotton value chain on Tuesday March 5, (today).”

    An online medium had reported yesterday afternoon that the CBN governor has been sacked by the Presidency and given two weeks to clear his table and “handover to an unnamed successor.”