CBN Will Continue Intervention Schemes to Support Economic Growth -Emefiele
The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said the bank would continue to support Nigeria’s economic growth through its intervention programmes.
According to Emefiele, CBN’s intervention schemes have helped stimulate growth and boost the country’s Gross Domestic Product (GDP). Fielding questions from journalists at the Monetary Policy Committee (MPC) meeting held in Abuja, the CBN boss said that as a development finance institution, the bank has a responsibility to support the economy, especially in difficult times.
This comes after the International Monetary Fund’s (IMF) in its 2021 Article IV consultation report on Nigeria, recommended that the CBN should consider cutting back its credit assistance programmes since they are likely to generate market distortions in the long run.
But Emefiele explained, “We reiterate the fact that the CBN remains a development finance-oriented central bank and it is normal for a developing economy to deploy the development finance tools through intervention to support the growth of the economy. “I think it is just reasonable that the CBN steps in to support the fiscal to fill that space, not through grants, but loans to smallholder farmers, SMEs and to wake up our manufacturing industries who are dead.”
He argued that the IMF would agree that the over N300 billion disbursed to over one million households helped to catalyse consumption expenditure that has helped Nigeria to turn positive in its GDP even though the GDP was still fragile and vulnerable.
“IMF knows that even our interventions to the manufacturing sector are helping and we have facts to show so. “Aside from the Anchor Borrowers Programme in agriculture, last month we went to Sokoto to launch a three million tons cement factory to increase manufacturing output in cement. And Mr President would be going to Lagos to commission a $2.5 billion fertilizer plant. “What would that do for us? The $2.5 billion fertilizer plant will result in an additional three million tons of urea in the country. Indorama produces three million metric tons, Notre produces 500,000 and that is 6.5 million metric tons per annum,” he added. Furthermore, he said,
“Our annual consumption is one million metric tons. What does that mean? They would export. We would earn foreign exchange that would create liquidity in our I&E window and lead to less reliance on the central bank for FX. “Yes, it is advice from IMF which we would take but at this time we are in a development finance mode where we must grow our economy and at the same time, we are doing everything possible to make sure our mandate of monetary and price stability remains sacrosanct.”
Meanwhile, he said the MPC had called on the CBN to double its developmental finance initiatives aimed at boosting domestic food output, saying it would help to moderate food inflation, thereby lessening headline inflation.
source Agro Nigeria