Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the apex bank under his watch has taken major leaps to diversify the economy away from largely oil-based economy through its numerous interventions, such that the country has moved from depending on rice importation to being an exporter of the product.
Emefiele said the CBN has, since he came on board, supported non-oil sectors such as agriculture, manufacturing, health care, education, power and aviation and other allied economic value chains.
He noted that the bank’s flagship Anchor Borrowers’ Programme (ABP) that heralded recent rice revolution in Nigeria, “has changed the long-standing dependence on imported rice as the country is not only depending on domestic production, but we have now become a rice exporting country. The Commercial Agriculture Credit Scheme (CACS) is a major special purpose vehicle to support commercial farmers in the country in different value chains including oil palm, cotton, cocoa, among others.”
Emefiele also said the Commercial Agriculture Credit Scheme (CACS) is a major special purpose vehicle to support commercial farmers in the country in different value chains including oil palm, cotton, cocoa, among others.
The CBN governor who made the disclosure in his keynote address at the Seminar for Finance Correspondents and Business Editors on Saturday, August 27, with the theme, ‘Policy Options for Economic Diversification: Thinking Outside the Crude Oil-Box,’ noted that the quest for building a more sophisticated economy anchored on agriculture, MSMEs, industrial and manufacturing concerns have become the major component of the bank’s monetary policy, in view of the recent challenges posed by the impact of Covid-19 and the Russia invasion of Ukraine.
Emefiele noted that, “as the world was gradually exiting the devastating negative shocks and impact of Covid 19 pandemic, the economic sanctions against Russia have further worsened the subsisting supply-chain disruptions across the globe, especially in Europe and Africa.
“The accompanying trade dislocations have aggravated supply shocks across regions, triggered unprecedented increases in commodities, energy and food prices as inflationary pressures persist to all-time high across regions. For instance, oil prices have been hovering above $100 per barrel over the past few months and have become a major drag to many industrialized economies of the world. Moreso, the blockage of shipments (predominantly grains and other food items) along the Black Sea have caused significant pressures on food prices, thus, underscoring the need to diversify our economy to ensure that unanticipated negative shocks such as this does not undermine our food security and self-sufficiency.
“Therefore, the quest for building a more sophisticated economy anchored on agriculture, MSMEs, industrial and manufacturing concerns have become the major component of our monetary policy. Nigeria has largely depended on the oil sector for revenue generation over the past four decades and the sustained decline in crude oil production has continued to negatively undermine the performance of the economy. Thus, there is the urgent need for a conscientious effort to diversify to other non-oil sectors. As I have often said, it is important that we work to create an economy that will enable us feed ourselves, create jobs for our teeming youths and improve the standard of living of our people. With our population growing by over 3 percent per annum over the past seven years, against a less than steady growth in output since 2019, expanding the production and industrial capacity of the economy must be given special attention to ensure overall macroeconomic stability.
According to Emefiele, “our continued support to the manufacturing sector and MSMEs have been yielding great results as the implementation of 44 items not valid for FX for imports has revealed. Let me take this medium to inform you once again that our intervention in the health sector, for example has begun to reduce the health care tourism being sought outside the country which is helping to conserve our foreign exchange and improve our well-being.
“Furthermore, the new 100 for 100 Policy on Production and Productivity (PPP), which is targeted at harnessing our local raw materials to increase our domestic production, as well as exports through our deliberate credit and other supports, will soon begin to yield quality results. Moreso, the RT200 FX initiative designed to take advantage of our large domestic production to other regional markets is targeted to increase foreign exchange inflows to the economy and support exchange rate stability. In addition, the on-going work at the Dangote Refinery, when fully completed, will stop fuel importation just as we witnessed in cement, sugar and fertilizer market.”
The CBN governor also said that the global economy is now characterized by rapid digitalisation across all sectors, particularly the financial system where Nigeria remains the leader of innovation and out of the box thinking.
He said as part of apex bank’s efforts in entrenching a resilient payments system, it has over the years established strategic initiatives and policies in the financial sector such as the Payments System Vision 2020 (2007), National Financial Inclusion Strategy (2012, 2018), Cash-less Policy (2012), Framework for Regulatory Sandbox Operations (2018, 2021), Open Banking Initiative (2021), among others.
He said, “Under the National Digital Economy Policy and Strategy (2020 – 2030), the industry is poised to accelerate the private sector-led efforts towards building a nation where digital innovation and entrepreneurship are used to create value and prosperity for all. Consequently, the Nigerian payment ecosystem has witnessed tremendous improvement over the years. To consolidate its efforts towards engendering a digital economy, the Bank deployed the eNaira, Africa’s first Central Bank Digital Currency (CBDC) in preparation for the payment landscape of the future, given the potential benefits that will accrue to a digital economy.
“The eNaira provides Nigerians with a cheap, generally accepted, safe and trusted means of payment and seeks to enhance financial inclusion, support poverty reduction, enable direct welfare disbursement to citizens, support a resilient payments ecosystem, improve availability and usability of central bank money, facilitate diaspora remittances, reduce the cost of processing cash, and reduce cost and improve efficiency of cross-border payment among others. Through the evolution of offline payments channels like agent networks, USSD, wearables, cards and near field communication technology, the eNaira would give access to financial services to underserved and unbanked segments of the population.
“The eNaira platform also provides an innovative layer for products and services to be built with the aim of enhancing Nigerians’ participation in the digital economy and promote further development of a burgeoning Fintech ecosystem.
“Whilst celebrating the successes achieved following the launch of the eNaira and the global recognition of the great job on-going by the CBN, it must be acknowledged that the journey ahead requires cutting-edge innovation and out of the box thinking to achieve the set-out objectives of economic diversification. Consequently, out of the box solutions would be the ones that drive financial inclusion, SME growth and the creation of start-ups; facilitate cross border trades and transfers as well as international remittances and FX exchanges; ensure effective implementation of welfare-inclined government programmes; and enhance efficiency in the interbank market.”
