*His Economic Genius
● How He Diversified the Nigerian Economy
● His Matchless Exploits In Fiscal Governance, Commerce
Many an economist has been seen to wallow and drown in the pale poetry of financial jargons. Not Godwin Emefiele.
The Governor, Central Bank of Nigeria (CBN) coasts on the fluid poetry of the policies he espouse; like a practiced surfboarder, he cruises atop storms, riding tempests and tides of commerce into pliant waves.
Some have likened him to an economic idol, spinning stirring narratives of his efficient leadership. Many more attest earnestly, in real time, to the effectiveness and depth of his interventions, amid the depression and chaos triggered by the COVID-19 pandemic, institutional failure and misgovernance to mention a few.
With an emphasis on agriculture and small and medium scale enterprises, the CBN, under Godwin Emefiele’s leadership, introduced several well-articulated interventions and initiatives to resolve the problems created by fluctuations in the prices of oil globally and sustainably grow the Nigerian economy.
Riding out economic storms, however, is no mean task. In pursuit of glory, Emefiele learned to thrive like a lily in unimaginable valleys. Like the daring mushroom that pierces the motionless eternity of earth, pushing clearly but obstinately, through faint form, till the hour of fertility strikes, the Delta State native seeks to flourish where many have cowed to defeat.
Shedding doubts like ragged clothing, he tilled the thick darkness of the soil, on whose cliff the fair flower advances, till the flag of its whiteness defeated the contemptible famine of night, and from the motion of light, spills itself in astonished seed.
The most appropriate way to describe the Governor, Central Bank of Nigeria (CBN), is “world class leader.” His sharp strategic mind, tremendous economic insight and humanitarian contributions all combine to make him a rare executive among the global corporate giants.
The road to professional glory for Emefiele, no doubt, had many detours. An exceptionally gifted economist, his exploits in the financial sector has established him as force to be reckoned with. Emefiele leaves nothing to chance.
His gritty depth underlines his charming, tenacious persona: he is a man who never backs down from a challenge. The same engaging qualities have propelled him from a modest beginning to becoming the governor of Nigeria’s apex bank, and one of the most innovative and ambitious fiscal managers and business leaders of his generation.
For years, economic diversification has been proposed as the solution to the economic woes plaguing Nigeria. However, well-intentioned efforts made to put the country on the path of prosperity through the diversification of the economy have not witnessed much success. Indeed, over the years, the sole dependence on crude oil export earnings had left the Nigerian economy reeling and vulnerable to price shocks in the global market even as the oil price volatility continues to weaken the country’s foreign exchange earning capacity. The dwindling revenues, as a result, made it challenging for various levels of government to effectively carry out statutory obligations. But that was until Emefiele was appointed in 2014 as Governor of the Central Bank of Nigeria.
Since he assumed office, he has consistently stressed the need to embrace economic diversification.
This has been a fulcrum of his development agenda as he asserts that the non-oil sector has the potential to sustain the economy, organically drive growth, create jobs and advance national development. It is in the light of this that the CBN has been very proactive and pragmatic in its intervention in critical sectors of the economy to spur growth and create jobs for Nigerians. One of such interventions is the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), an initiative of the Bankers’ Committee targeted at start-ups and the expansion of established companies as well as the reviving of ailing companies to enhance job creation and agribusiness for a sustainable economy.
The AGSMEIS aims to improve access to affordable financing for Micro, Small and Medium Enterprises, MSMEs, particularly those operating in the informal sector of the economy, and to support the Federal Government’s efforts and policy measures to promote sustainable economic development and employment generation. It also aims to boost the managerial capacity of agri-businesses and MSMEs to grow them into large corporate organizations in line with the Federal Government agenda to develop the real sector and promote inclusive growth.
This initiative requires all Deposit Money Banks to set aside five percent (5%) of their annual profit after tax (PAT) to support and sustain its management. While flagging off the disbursement of funds to the first set of beneficiaries in Abuja, the CBN governor noted that the challenges of youth unemployment and restiveness must be confronted with strategic innovative thinking to provide a sustainable solution. He stated that the committee agreed to design and fund a suitable scheme aimed at bridging the huge financing gap for MSMEs and that the Fund was also aimed at job creation, financial inclusion, and inclusive growth for Nigerians, particularly the teeming youth population.
“Micro, Small and Medium Enterprises in the rural areas of Nigeria are viewed as a new concept, especially in traditional African societies where rural areas are synonymous with subsistence farming by male folks to cater for the needs of their immediate family and women in rural areas, whose role, according to the culture of many tribes in Nigeria, is to cater for the children at home, cook meals and do the laundry.
“In a male-dominated society especially in African countries, issues of women involvement as entrepreneurs driving Micro, Small and Medium Enterprises generate a lot of attention. Apart from the traditional roles ascribed to women by various cultures in Nigeria, women entrepreneurs are stereotyped by other women as ambitious and rebellious for stepping out of their traditional roles.
“Research in Nigeria shows that entrepreneurs in rural areas start new businesses due to the quest for financial autonomy; passion; power and determination to succeed. Most of the rural population provide for their families through subsistence farming and other agricultural practices such as fish farming, poultry supplemented by petty trading.”
The first batch of beneficiaries is youths who had been trained on various entrepreneurship, vocational and management skills across the country by Entrepreneurship Development Institutions and Centres such as Fate Foundation, Lagos Business School, House of Tara and Thrive Agric. Unlike practices where physical funds were disbursed to beneficiaries upon completion of their vocational training, beneficiaries are being provided with the specific implements needed to practice their vocations procured under the scheme.
AGSMEIS direct component beneficiaries would be able to access loans to a limit of N10 million at a maximum tenor of up to seven years. However, beneficiaries must all possess a valid BVN, which shall be registered on the National Collateral Registry and used to track repayments and blacklist any defaulter.
But that is not all. There is also the widely-applauded and innovative Anchor Borrowers’ Programme, an initiative to boost agricultural production, improve foreign exchange and reverse Nigeria’s negative balance of trade on food. At the launch of the ABP in 2016, Emefiele said the apex bank’s concern was about the huge foreign exchange being spent on the importation of food items that could be produced locally.
According to him, the allocation of foreign exchange to the importation of items such as rice, wheat, milk, and fish among others, had contributed greatly to the depletion of the nation’s foreign reserves, especially in the face of low oil revenue resulting from falling oil prices. Emefiele disclosed that the rising unemployment and escalating food imports prompted the bank, under his leadership, to shift from concentrating only on price, monetary, and financial system stability to act as a financial catalyst in specific sectors of the economy particularly agriculture, to create jobs on a mass scale, improve local food production, and conserve scarce foreign reserves
Six years after, President Muhammadu Buhari acknowledged that the ABP had supported over 4.8 million smallholder farmers across Nigeria to boost production of 23 agricultural commodities in the country and that the rise in Nigeria’s rice production since the commencement of the programme could be attributed to the effectiveness of the ABP initiative.
“The Anchor Borrowers Programme has so far supported over 4.8 million smallholder farmers across Nigeria for the production of 23 agricultural commodities, including maize, rice, oil palm, cocoa, cotton, cassava, tomato, and livestock. Today, rice production in Nigeria has increased to over 7.5 million metric tonnes annually,” President Buhari remarked.
The ABP captures smallholder farmers cultivating cereals (rice, maize, wheat etc.) cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock. Loans are disbursed to the beneficiary farmers through Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) and Microfinance Banks (MFBs), which the programme recognises as Participating Financial Institutions (PFIs).
According to the guidelines of the programme, upon harvest, the farmer repays their loans by taking their harvest to ‘anchors’ who pay the cash equivalent to the farmer’s account. Before the initiation of the ABP programme, the president said Nigeria’s average rice production between 1999 and 2015 was less than four metric tonnes annually. But following the introduction of the ABP initiative, production rose from 3.9 mmt in 2015 to 4.5 mmt (15 per cent increase) in 2016, data published by the United States Department of Agriculture (USDA) showed.
In 2017 and 2018, Nigeria’s milled rice production averaged 4.5 mmt, and rose to 5.0 mmt(11 per cent increase ) in 2019. In 2020, amidst the upsurge of the coronavirus pandemic and the devastating impacts of climate change and insecurity, production decreased to 4.8 mm but later rose to 5.0 mmt in 2021. With this, Nigeria is currently ranked 14th highest rice producer in the global pecking order and the highest producer of the commodity in Africa. As at February 2022, Emefiele disclosed that under the Anchor Borrowers Programme, it had disbursed N948bn to almost 5million smallholder farmers who cultivated 5.2 million hectares of farmland across the country, thereby creating 12.5 million direct and indirect jobs.
The Cotton Textile and Garment (CTG) sector is one of the oldest industries in Nigeria. It was primarily active in the 60s and, by the 1970s and early 1980s, Nigeria was home to Africa’s largest textile industry with over 180 textile mills in operations, which employed close to over 450,000 people. But over the years, textile mills collapsed across the country and the sector died a slow, painful death. Thus, cotton production suffered neglect by both Federal and State Governments. After the dissolution of the Nigerian Cotton Board, there was a vacuum on cotton production, processing and marketing. That was until Emefiele came. Realising that the CTG sector is a potential cash cow that can effectively revive and diversify Nigeria’s economy, the CBN under Emefiele introduced several far-reaching interventions that have not only seen the sector roar back to life, but is strengthening economic recovery, boosting employment and creating wealth for Nigerians.
Between 2019 and 2020, the apex bank disbursed a total of N44 billion across the CTG value chain with over 278,500 hectares being financed. Emefiele said, “The CBN’s intervention in the Cotton, Textile and Garments (CTG) industry is in full swing and huge progress has been made, some of which include: Over N120bn invested across CTG value chain; over 320,000 farmers financed between 2018-2020; Expected output for seed cotton in 2020 is projected to be over 300,000 metric tons. This is expected to enhance the production capacity of the ginneries in producing over 102,000 metric tons of cotton lint and this is expected to meet and surpass the cotton lint requirement of our Textile Industries.”
Indeed, the CTG sector has achieved a multiplier impact and enhanced the drive toward anti-smuggling whereby over 15 textile smugglers accounts were frozen; the capacity of ginneries increased exponentially while over 340,000 farmers engaged and earned over N31.6bn; over 12 ginneries were funded and over 450,000 employments generated. Emefiele stated that the main targets of the CBN intervention in the sector were to close the seed cotton gap of 450,000 metric tonnes by 2022 and increase the capacity utilisation of ginneries from less than 30 per cent to 80 per cent within the same timeline. He said the CBN also sought to reduce smuggling and dumping of textile by at least 40 per cent by the end of 2022. The CBN says it expects to do more.
On assumption of office for his second term in 2019, Emefiele, while giving the strategic framework for his economic diversification program, said, “We have a responsibility to reverse the current ugly trend where any external shock affecting oil producing countries bring us to our knees. “Targeted Development Finance Building on the success of our Anchor Borrowers Program and other intervention programs geared towards supporting the growth of our agriculture and manufacturing sectors, and in keeping with the recent Presidential Directives, we intend to: Boost productivity growth through the provision of improved seedlings, as well as access to finance for rural farmers in the agricultural sector, across 10 different commodities namely: Rice, Maize, Cassava, Cocoa, Tomato, Cotton, Oil-palm, Poultry, Fish, and Livestock/Dairy.”
Emefiele continued, “Our choice of these 10 crops is driven by the amount spent on the importation of these items into the country, and the over 10 million jobs that could be created over the next five years if efforts are made to expand cultivation and processing of these items in Nigeria.
“So far, we have held series of engagements with importers and producers of these products. Most of them have committed that they would install or expand their production capacities in Nigeria. We believe these measures will help to boost not only our domestic outputs but also improve our annual non-oil exports receipts from $2billion in 2018 to $12billion by 2023.”
