THEWILL EDITORIAL: CBN Intervention Programmes: Smoothening  The Rough Edges

A curious revelation was made recently by the Central Bank of Nigeria when its Acting Director, Corporate Communications, Osita Nwanisobi, declared that the response of the South-East geopolitical zone to the apex bank’s intervention programmes in agriculture was not encouraging.

Nwanisobi who spoke at a fair organised in Enugu for farmers and bank officials in Enugu State, applauded the CBN intervention initiatives as successful. He lamented that the programmes’ reception had been low in the South-East, a comment that stunned the audience.

“While other zones had continued to benefit, we noticed that there seems to be a little bit of lethargy by people from the South-East in embracing these interventions and that is why we are coming out to aggressively talk to them,” the CBN spokesman stated. He urged the zone to embrace the intervention programmes in order to grow their business and agriculture.

Media reactions have described the CBN spokesman as being clever by half. Among other things, the CBN is accused of deliberately excluding the South-East in its intervention programmes to favour other parts of the country. Members of this zone lament that their applications were hardly approved by the apex bank and that they hardly access the intervention funds in agriculture and other sectors which their counterparts in other zones have benefited.

It is not our wish to judge the parties that are right or wrong in this matter.  What is evident, however, is that there is little or no presence of CBN intervention programmes in agriculture, in particular, in the South-East and this is lamentable.

In furtherance of its development finance agenda, the CBN introduced the intervention policy in 1977 to address Nigeria’s economic development challenge. The micro-schemes created under the CBN intervention policy are all sector-specific, thus result-oriented. They include the Agricultural Credit Guarantee Scheme (ACGS); Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL); Commercial Agriculture Credit Scheme (CACS); the N220 billion Micro, Small and Medium Enterprises (MSME) Fund; and the Anchor Borrowers’ Programme.

To save the economy from the catastrophic consequences of COVID-19, the apex bank took proactive measures by rolling out various intervention programmes that played the role of the proverbial stitch that saves nine.  These include the N50 billion Targeted Credit Facility (TCF) as a stimulus package to support households and micro, small and medium enterprises (MSMEs) affected by the COVID-19 pandemic

Others include the one-year extension of a moratorium on principal repayments for CBN intervention facilities; reduction of the interest rate on intervention loans from 9 percent to 5 percent; and strengthening of the Loan to Deposit ratio policy  (stepping up enforcement of directive to extend more credit to the private sector).

Others are granting regulatory forbearance to banks to restructure terms of facilities in affected sectors; and additional N100 billion intervention funds in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/build capacity. The interventions came with clear guidelines devoid of implementation bottlenecks.

With this determined objective of the apex bank, any well-meaning Nigerian should be concerned that schemes meant to grow agriculture, create employment and boost the gross domestic product (GDP) are non-existent in the South-East or any zone for that matter. This will defeat the purpose of the intervention policy introduced in 1977, which has gulped over N4 trillion.

We therefore urge the CBN to take urgent and concrete steps to address the low or non-participation of the South-East in its intervention programmes. This can be done through definite programmes developed in conjunction with strategic groups and representatives of the organised private sector. These include the state and zonal chapters of the Nigerian Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Chambers of Commerce and Industry, Associations for Farmers in Nigeria (AFAN), Association of Small Business Owners of Nigeria (ASBON), Association of Small and Medium Enterprises (ASME), and the others.

Co-operative societies at town union and local government associations should also be consulted in the arrangement that include banks and appointed CBN officials.

It is important that the progress of any intervention programme is properly and effectively monitored.  There are reports of beneficiaries of intervention funds not being able to access foreign exchange to import machinery and other equipment approved by the CBN under the scheme.  This has led to huge losses as the beneficiaries are caught up in the web of currency devaluation and attendant inflation.

We applaud the CBN’s concern over the lack of its agricultural intervention programmes in the South-East. The apex bank should now take concrete steps to address the matter and reverse the trend. That is where the success story lies.