…credit to economy grows 6.83% in 5-month
By Oludare Mayowa
The Central Bank of Nigeria (CBN’s) monetarists have asked the federal government to explore the option of diaspora bond and Public-Private-Partnerships to fund infrastructural development in the country.
At their meeting on Tuesday, the monetarists said poor infrastructure has contributed to the rising domestic price and urged the government to prioritize investment in public infrastructure.
According to them, the government should prioritise improvement of transportation networks, power supply and telecommunication facilities as part of measure to ameliorate inflation in the economy.
“Funding for such projects, the Committee noted, could be sourced through Public-Private-Partnerships, as well as the issuance of diaspora bonds,” the Monetary Policy Committee (MPC) members said at the end of their two day policy meeting in Abuja.
They said issuance of diaspora bond would also have complementary effect on the nation’s foreign exchange reserves and help support the local currency.
“It emphasized the complementary role these bonds would play to boost foreign exchange supply, improving accretion to reserves and easing the exchange rate pressure,” the MPC said in its communiqué at the end of the meeting.
Nigeria’s foreign exchange reserves stood at $33.31 billion by July 26, down from $33.41 billion a month earlier.
Speaking at the press briefing to announce the decision of the MPC on interest rate, the Governor of the CBN, Godwin Emefiele said aggregate credit to the economy grew by N1.55 trillion in the first five months of the year.
He said credit expansion by the banking sector rose to N24.23 trillion at the end of May 2021 compared with N22.68 trillion at end-December 2020.
Under the CBN development finance initiatives, a total of N756.51 billion was granted to 3,734,938 small holder farmers cultivating 4.6 million hectares of land.
Emefiele said N120.24 billion out of the N756.51 billion was extended for the 2021 Wet Season to 627,051 farmers for 847,484 hectares of land, under the Anchor Borrowers’ Programme (ABP).
For the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), the sum of N121.57 billion was disbursed to 32,617 beneficiaries; and for the Targeted Credit Facility (TCF), N318.17 billion was released to 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs).
“Under the National Youth Investment Fund (NYIF), the Bank released N3.0 billion to 7,057 beneficiaries, of which 4,411 were individuals and 2,646 SMEs.
“Under the Creative Industry Financing Initiative (CIFI), N3.22 billion was disbursed to 356 beneficiaries across movie production, movie distribution, software development, fashion, and IT verticals.
“Under the N1.0 trillion Real Sector Facility, the Bank released N923.41 billion to 251 real sector projects, of which 87 were in light manufacturing, 40 in agrobased industry, 32 in services and 11 in mining,” Emefiele stated.