The Governor of Central Bank of Nigeria (CBN), Godwin Emefiele has led the apex bank to frontiers beyond monetary economics in a bid to save a fragile economy. His interventions are a turnip for the books as far as Nigeria’s economic development is concerned. He looks set to write his name in the development annals of the economy.

Hiss presence at the commissioning of BUA Group’s three million metric tonnes (3MMT) per annum Cement Line 4 Factory in Sokoto was not an accident neither was he there as a mere guest. Emefiele’s presence was necessitated by the financing role of the Central Bank of Nigeria (CBN) to get the project off the ground with the objective of achieving self-sufficiency for the country in cement production.

That event in Sokoto speaks directly to Emefiele’s passion and philosophy for the economy. It is the reason his CBN has gone far beyond the normal call of Central Banks, which is price stability to also include that of fortifying strategic sectors of the economy from agriculture to power, healthcare and SMEs among others. “With our various development finance support for the real sector and administrative measures to deal with excess liquidity, recovery of the Nigerian economy is strengthening,” he said, just as the economy exited the last recession. If anything, this establishes his understanding of the need for monetary policy and fiscal policy to be in sync for any meaningful growth to the economy.

The trajectory of the economy since the headwinds occasioned by the coronavirus pandemic vindicates his position as the economy has since vaulted from a trough of – 3.62 percent in Q3 2020 to 0.11 per cent in the three months between October and December from a year earlier. At the time, the National Bureau of Statistics (NBS) said of the growth, that it reflected the gradual return of economic activities following the easing of restricted movements and limited local and international commercial activities in the preceding quarters. The economy has since grown to 4.03 per cent as of Q3 2021. The International Monetary Fund (IMF) and the World Bank have estimated the economy to grow more than 2 per cent in 2022. This is as local analysts Augusto and Co. sees the economy growing over 4 per cent.

Since his appointment as governor of the CBN on June 3rd, 2014, Emefiele has steered monetary policy towards stability in exchange rate and interest rate (as seen in the Monetary Policy Rate MPR). Although the Naira has weakened in the period, it reflects the real value of the currency in the face of economic realities. Allowing the Naira to find its real value has the potential to encourage exports, which will ultimately help the Naira to appreciate.

To that end, the CBN has done everything to protect it from speculators including stopping Bureau De Change (BDC) operators from participating in the forex market because of the leakages they cause in the system that allows the Naira to make progressive losses; the naira has thus stayed at just over N400 to the dollar, give or take.
“We are concerned that BDCs have allowed themselves to be used for graft,” Emefiele was quoted as saying. His concern as a patriot is that the BDCs circumvent the system by channeling forex to the black market than use the official Investors and Exporters (I&E) window, otherwise known as Nigerian Autonomous Foreign Exchange Rate Fixing, NAFEX.

Exchange rate management and setting an appropriate interest rate through the Monetary Policy Committee (MPC) by the CBN, has helped the economy achieve price stability over the years. Price stability has the effect of bolstering confidence in the economy by foreign and local investors. This is in keeping with the CBN exchange rate policy objective to preserve the value of the domestic currency, maintain a favourable external reserves position and ensure external balance without compromising the need for internal balance and the overall goal of macroeconomic stability.

An indicator that has consistently shown that the economy is on the right growth trajectory as a result of the CBN intervention is the December Purchasing Managers Index (PMI), which has a reading of 52. According to Investopedia, “the PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change. The further away from 50 the greater the level of change”. What this means is that the Nigerian economy is set to expand further.

But Emefiele has gone beyond creating an enabling macroeconomic environment to actually empowering players in the economy to contribute to the planned economic expansion by dolling out financial support to industry players.
Perhaps the biggest impact of Emefiele’s genius is felt in the Agric sector where the CBN has intervened by way of funding and materials. An easy reference is the Anchor Borrowers Programme (ABP) which has benefited over 4 million farmers from across the country to the tune of almost a trillion naira. This agricultural loan scheme launched in 2015, was designed to boost agricultural yields, halt large volumes of food importation and address negative trade balance.

The fund disbursed under the ABP, according to the CBN is to over 4.5 million smallholder farmers, who are cultivating 21 commodities across the country. Part of the fallout is the recent Rice Pyramid that towered off the ground in Abuja this January to the applause of the public with Mr. President in attendance.
A novelty in the programme is that “all excess output aggregated from the financed farmers will be released to the Nigeria Commodity Exchange (NCX) to help moderate the prices of food in the market”. This is especially expedient in a period that there is a global food inflation, of which Nigeria is not spared.

Beyond agriculture, the Bank’s intervention programmes are focused on boosting productivity in manufacturing/industries, energy/infrastructure, healthcare, and Micro, Small and Medium Enterprises (MSMEs).
Just last week, Emefiele kicked off the 100 for 100 Policy on Production and Productivity (PPP) with the disbursement of N23.2 billion to 28 companies as part of efforts to accelerate manufacturing output and promote further diversification of the economy. The 100 for 100 Policy on Production and Productivity (PPP) is targeted at private companies who have a project to fund and can apply for as much as N5 billion under the scheme.

When fully operational, the projects are expected to create over 20,000 direct and indirect jobs across multiple sectors of the economy, as well as generate about $125.80 million in foreign exchange earnings, Emefiele told newsmen.

According to him, The CBN is prepared to select 100 private sector companies with projects that have the potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.

The health sector also came under the radar of the Emefiele-led CBN as it has disbursed cumulative N108.85 billion to 118 healthcare projects in the sector, according to the latest report by the MPC. According to the Committee, the disbursement was part of the bank’s effort at supporting a resilient healthcare sector.

“As part of its effort to support the resilience of the healthcare sector, the bank also disbursed 498 million to two (2) healthcare projects under the Healthcare Sector Intervention Facility (HSIF), bringing the cumulative disbursements to 108.85 billion for 118 projects, comprising of 31 pharmaceuticals, 82 hospital and 4 other services,” reports say.

But industrial take off cannot be realized in an atmosphere of low power supply. So it becomes apposite to encourage the growth of the sector, which the CBN did by granting the power sector a cumulative N68 billion with the most recent being N47.83 billion under the mass metering programme.
The sum is to help facilitate the procurement and installation of 856,026 electricity meters across the country under the National Mass Metering Programme (NMMP).

The NMMP is a metering initiative of government geared towards mass metering of Nigerians by providing loan facilities to the electricity distribution companies (DisCos) for the procurement of meters for customers; and the local meter Manufacturers, for the manufacturing and assembling of meters. The direct fallout of this initiative, the CBN says is, the improved collections by electricity distribution companies as a result of increased meter installations.

Other interventions by the CBN in the electricity sector are funds to the tune of N274.33 billion under the Nigeria Bulk Electricity Trading Partner Assurance Facility (NBET-PAF); N20.58 billion released to the DisCos under the Nigeria Electricity Market Stabilization Facility-Phase 2 (NEMSF-2); the sum of N3 billion to further support the development of enabling infrastructure in the gas industry.
Emefiele’s developmental approach to Central Banking is now the subject of discussion in many forums; the suggestion is that if the programmes are sustained, the economy should well be on its way to sustainable growth and development.