…To provide N1.8trn for Economic Sustainability Plan
THROUGH the implementation of the Loan to Deposit Ratio Policy, credit provided by banks to the economy has increased by N3.77trn, from N15.57trn in May last year, to N19.3trn as of the end of August this year.
The Governor of the Central Bank of Nigeria, Godwin Emefiele, disclosed this while speaking on the outcome of the two-day Monetary Policy Committee meeting held at the CBN headquarters in Abuja.
Emefiele said through the policy, the banks had been able to provide funds for key sectors of the economy.
For instance, he said during the period, the manufacturing sector got N866bn, consumer credit, N527.6bn; oil and gas, N477bn; agriculture, N287bn; and construction, N270bn.
He added that out of the N2.3trn Economic Sustainability Plan of the Federal Government, the sum of N1.8trn would be provided by the CBN.
The Economic Sustainability Plan will last for one year, focusing on achieving mass employment and mass domestic production that are not dependent on importation or foreign exchange expenditure.
Speaking on the funding, Emefiele said, “CBN is set to contribute over N1.8trn of the total sum of N2.3trn needed for the Federal Government’s one year Economic
Sustainability Plan, through its various financing interventions using the channels of Participating Financial Institutions.”
He appealed to stakeholders to take advantage of these intervention initiatives to help support a quick rebound in economic growth.
Giving an update on the intervention disbursements by the apex bank to reflate the economy, improve aggregate supply and drive down inflation, the Governor said the apex bank had released N3.5trn to various sectors of the economy.
He said, “So far, total disbursements from the Bank’s interventions in the wake of the COVID-19 pandemic amount to N3.5trn, including Real Sector Funds (N216.87bn); COVID-19 Targeted Credit Facility (N73.69bn); AGSMEIS (N54.66bn); Pharmaceutical and Health Care Support Fund (N44.47bn); and Creative Industry Financing Initiative (N2.93bn).”
Under the Real Sector Funds, he said a total of 87 projects that included 53 Manufacturing, 21 Agriculture and 13 Services projects, were funded.
In the Health Care sector, the Governor said 41 projects, which included 16 pharmaceuticals and 25 hospital and health care services were funded.
Under the Targeted Credit Facility, he said 120,074 applicants had received financial support for investment capital.
He noted that the Agri-Business/Small and Medium Enterprise Investment Scheme intervention had been extended to a total of 14,638 applicants, while 250 SME businesses, predominantly the youths, had benefited from the Creative Industry Financing Initiative.
On the persistent uptick in inflation, the CBN governor said members of
the MPC were deeply concerned about the development.
He noted that the persistent rise in inflation was driven primarily by legacy structural factors such as the inadequate state of critical infrastructure and broad-based security challenges across the country, which dampened production activities.
Other factors, according to him, include the disruptions to supply chains following restrictions to movement to curb the spread of the pandemic, adverse weather conditions, which resulted in flooding of farmlands as well as the inflation pass-through to domestic prices following the
depreciation in the exchange rate.
