CBN explains roles in agricultural financing
THE Central Bank of Nigeria (CBN), has revealed that it is directly involved in financing agriculture, infrastructure and Micro Small and Medium Enterprises (MSMEs) to guarantee real growth in the economy.
CBN Director, Corporate Communication, Mr. Isaac Okorafor revealed this recently in an interview with the News Agency of Nigeria (NAN) on the sidelines of the International Monetary Fund (IMF)/World Bank meetings in Washington DC.
The IMF had earlier recommended that the CBN end its direct intervention in the economy and focus on its key mandate, which is ensuring price stability.
Reacting to this, Okorafor said there is nothing unusual about the CBN’s intervention in the economy, while also maintaining that one of the core functions of the Central Bank in any country is to ensure price stability.
According to him, “We have been instructed to focus on inflation target which is just one bit of it, IMF is expecting us to import food and not make arrangements to produce our own foods”
Okorafor added that the CBN is funding farmers in growing and distributing food, as well as reducing the prices of food in the market. He said the apex bank intervenes in infrastructure because the high cost of doing business had driven up interest rate and other costs.
He noted that the bank’s strategy was already yielding positive results and millions of jobs had already been created through the provision of credit to farmers and small scale enterprises.
Okorafor also identified that the bank’s Anchor Borrowers’ Programme (ABP) is aimed at creating economic linkages between more than 600,000 smallholder farmers and reputable large-scale processors with a view to increasing agricultural output.
On this backdrop, he noted that the sum of N40 billion was set aside from the N220 billion MSMEs Development Fund for farmers at a single-digit interest rate of nine percent.
The CBN Director also explained that the apex bank, under Mr. Godwin Emefiele’s leadership acts as a financial catalyst in specific sectors of the economy, particularly agriculture. He added that the aim is part of efforts to create jobs, improve local food production, and conserve scarce foreign reserves.
He further noted that the CBN had introduced the Youth Innovative Entrepreneurship Development Programme (YIEDP), inaugurated in March 2016 to target 10,000 youths in the space of four years.