No less than N1.3 trillion ($4.3 billion or €3.8 billion) was spent by the Nigeria on the importation of rice, fish, sugar and wheat in the last 12 months, the Central Bank of Nigeria (CBN) said on Tuesday.
The bank’s Deputy Governor, Corporate Services, Edward Lametek, spoke at a seminar organised for Finance reporters in Owerri, Imo State.
Speaking on the theme: “Galvanising development finance and monetary policy for growth”, the bank chief restated the bank’s commitment to local production of the commodities, saying that they put a lot of pressure on the country’s import bill.
He said economic diversification remained a sustainable way to grow the economy.
Lametek noted the Anchor Borrowers’ Programme (ABP), which was launched in November 2015, was designed to build partnerships between small holder farmers and reliable large-scale agro-processors, with a view to increasing agricultural output, while improving access to credit for farmers.
He said: “Our targeted focus on the agricultural and manufacturing sectors was driven by the vast opportunities for growth in these sectors given our high population.
“These sectors have the ability to absorb the growing pool of eligible workers in our effort to meet local demand and save critical foreign reserves. For many countries, the objectives of monetary policy are explicitly stated in the laws establishing the Central Bank, while for others, they are not. The objectives of monetary policy may vary from country to country.”
He said the apex bank’s approach to stimulating economic development is centered on Agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure development.
“You are no doubt aware that the Central Bank of Nigeria has transcended its core mandate of maintaining monetary, price and financial system stability, to undertake developmental initiatives with a view to spurring economic growth and job creation.”
Lametek said efforts at these development finance initiatives have helped to accelerate the attainment of government’s economic diversification programme, adding that diversifying the economic base presents a more sustainable and stable option.
He said: “Given the foregoing, it is our conviction that focusing our developmental efforts on sectors with inherent potential for growth, employment and accretion to foreign reserves, would enhance the fortune of the Nigerian economy.
“The CBN increased its lending to the agricultural and manufacturing sectors, through targeted intervention schemes such as the Anchor Borrowers’ Programme, Commercial Agricultural Credit Scheme and the Real Sector Support Facility.”
He said Nigeria’s recent experience with recession attests to the value of effective implementation of monetary policy.
Lametek said: “Though we adopted unconventional or heterodox monetary policies, they were however, well thought through and have been yielding significant gains for the economy.
“Noticeably, the GDP recovery in the third quarter of 2017 has been sustained for nine successive quarters after five consecutive quarters of negative growth.
“These unconventional monetary policy initiatives have been premised on ensuring credit delivery to critical sectors of the economy. This has informed the directive to Deposit Money Banks to maintain a minimum Loan to Deposit Ratio (LDR) of 65 per cent by the end of this year. The bank is also creating the necessary eco-system to inculcate a better credit culture among Nigerians.”
He said CBN’s policies have helped the country to achieve significant reductions in its annual imports bill, and increased non-oil exports.
Lametek said: “Our development finance interventions have helped to bolster agricultural production by removing obstacles faced by small holder farmers. We have also improved access to markets for farmers by facilitating greater partnership with agro-processors and industrial firms in the sourcing of raw materials. So far, the programme has supported more than 1.5m farmers across all the 36 states of Nigeria, in cultivating 16 different commodities over 1.4 million hectares of farmland. It has also supported the creation of over 2.5m jobs across the agricultural value chain.”
He said the CBN intervention in the rice value chain in Kebbi and other rice-producing states raised local rice production from 2.5 million tonnes in 2015 to 5.8 million tonnes in 2017.
The cotton intervention, with the flag-off of input distribution to 150,000 cotton farmers, encouraged them to cultivate 150,000 hectares in 23 states.
According to them, “the cotton planted by these farmers has begun fruiting, while some are ready for harvest and off-take.”
Africa spends more than $50 billion annually on the food import even though the continent has 60% of the arable, unused agricultural land in the world. Efforts to make African countries self-sufficient have not been successful because of the structural hindrances to investment which hamper the inflow of foreign expertise and capital, say analysts.