Buhari’s midterm report: CBN takes the cake

Being a farmer himself, it was easy for president Muhammadu Buhari to spot the fact that the Central Bank of Nigeria, CBN Anchor Borrowers Program has been making waves by having massive impact on the farming sector across the country and by extension helping in lifting up Nigeria’s economy which due to the sharp drop in crude oil price had tanked since the inception of the current administration.

President Buhari who used the opportunity of October 1st Independence Day anniversary broadcast to Nigerians to sort of present the mid term report of his stewardship in the past two years , also held aloft the recently launched  CBN National Collateral Registry program also known as Collaterals Bank aimed at making credit more accessible to the small scale enterprises, SMEs as another milestone achievement under his watch.

Through the new scheme, owners of SMEs and a critical mass of micro entrepreneurs who constitute over 90% of the estimated 17 million registered SMEs in Nigeria creating some 32 million jobs would be able to use their movable assets such as plants and equipment, vehicles and even furniture and fixtures in their businesses as collateral for obtaining loans from banks.

That’s a welcome departure from the past when it was mainly landed properties which are immovable and difficult for SMEs to come by, that were acceptable by financial institutions as collateral.

With a critical mass of Nigerians having easier access to credit owing to the existence of the collateral bank, the ensuing frenzy of business activities are guaranteed to buoy up the economy such that it could accelerate the nation’s economic recovery.

In that respect, the CBN initiative with Godwin Emefiele as governor , aimed at bolstering financial inclusion for the SMEs and micro enterprises is on point.

And a consensus of opinion is that it has the ability and capacity to provide the required muscle to engender the recovery of Nigerian economy from the recession that it plunged into a couple of years ago owing to the sharp drop in the international price of crude oil which is Nigeria’s main foreign exchange earner.

Another policy that gave CBN the leverage of taking the cake in the president’s mid term report is the quest for creating 10,000 jobs in the agriculture sector for unemployed youths in each of the 36 states of the federation through CBN’s development finance initiative.

The initiative which is known as  Accelerated Agricultural Development Scheme (AADS) is envisioned to create a total of  360,000 jobs nationwide for youths in agriculture value chain.

It is common knowledge that unemployment and poverty are like Siamese Twins which are by products  of societal challenges such as lack of visionary leadership, insecurity and bad governance that are inimical to  progressive social existence.

These are the existential issues currently bedeviling Nigeria and which the relevant authorities are currently struggling to address.

According to the National Bureau of Statistics, NBS, unemployment rate that had skyrocketed to astronomical levels a year ago, has recently dipped. But with youth unemployment still reckoned to be roughly 25% of the jobless , which is in excess of 20 million people who are either unemployed (or underemployed), it is not difficult to figure out why CBN has made job creation for the youths its next focal point.

Obviously, its part of its quest to contribute significantly to president Buhari’s arsenal of policy initiatives that would facilitate putting the economy on even keel.

Now, let me crave your indulgence to take you behind the scenes to dwell on why CBN’s Anchor Borrowers program which is aimed at creating a farming Renaissance might have caught president Buhari’s attention.

Following the crash of crude oil price in the international market and its debilitating effect on Nigeria’s foreign reserve which became inadequate for financing at least six months of import (which is the minimum requirement for a country’s economy to be adjudged as being in good health), Emefiele knew there had to be alternative means of sourcing forex to sustain the nation’s burgeoning bureaucracy.

Some of the  factors responsible for the ballooning of expenditure on bureaucracy are the  whooping N125b budgeted towards funding 109 senators and 360 House of Representatives members in budget 2017 and the astronomical  cost of salaries and emoluments for public and civil servants who in-spite of the dwindling income in the national treasury have been receiving salary increases following labor unions clamor for wage raise without commensurate improvement  in productivity.

And as agriculture is the only product for which Africa and indeed Nigeria has comparative advantage in international trade, it’s unsurprising that the CBN governor decided to venture into massive funding of the sector.

That’s a move akin to United Arab Emirates, UAE’s decision some decades ago to shift some of her oil wealth from Abu Dhabi area into Dubai-formerly a quaint boating building province. And by so doing, Dubai was transformed into the biggest trading and tourist location in the Middle East and perhaps one of the world’s best holiday destinations.

That also probably explains why mr president’s Independence Day broadcast was centered on the economy with particular reference to interventions by the CBN and their positive impact on the economy.

The obviously satisfied president proudly announced the benefits of investing about N43b by the CBN in Anchor Borrowers initiative which he launched as president only in November 2015 (less than 2 years ago) and which has now generated bountiful harvest nation wide.

Indeed it is a thing of joy that rice is now widely cultivated in several states ranging from kebbi, Lagos, ebonyi to jigawa states so much so that it is being projected that the staple commodity would sell for about N13,000 naira during the Yuletide which comes up in less than three months thence.

Considering that it is estimated that Nigeria has been spending about  N1b daily on rice import, the rice revolution is expected to lead to staggering savings in foreign exchange for the country.

Apart from rice revolution in the aforementioned states, Ondo,Edo, Delta, lmo, Cross River, Benue, Ogun, Kaduna and Plateau states have also accelerated the cultivation of wheat, maize, cotton, soya beans, poultry, cassava and groundnuts as well as cashew and potatoes amongst other cash crops. It is also worthy of mention that in 2010, Nigeria spent about N632b importing wheat which constitutes a major part of staple food in Nigeria and that figure might have risen over the past 7 years.

But with the rebirth of farming, engendered by CBN’s intervention more forex conservation would have been achieved in these past few months.

Without doubt, the aforementioned  positive developments in the agricultural sector have had positive effects on the nation’s treasury from which a whopping N24 trillion, by some estimates, goes towards importing food as l earlier mentioned, one billion just in rice import daily.

It may be recalled that Nigeria’s golden age was the period that groundnut pyramids competed with the minarets in the skyline of Kano, and cotton cultivated in Funtua, katsina state area, provided raw materials that fed the ginneries and textile factories that created jobs for thousands of families in the days of yore in the northern axis of Nigeria.

Basically the same narrative applied to cocoa crop in Western Nigeria and Oil Palm and Rubber plantations in the south-east and south-south Nigeria.

Please keep in mind that it is the cash crops listed above-groundnut, cotton, cocoa and oil palm as well as rubber that were the main foreign exchange earners for Nigeria.

And the funds were used to develop the four regions into the envy of many African countries such as free education and first color television in Africa established in western Nigeria,  before the advent of crude oil that has now become more of a curse than blessing.

To underscore the squandering of Nigerian oil/gas wealth, the Nigerian Extractive Industries Trade Initiative, NEITI Executive Secretary, Waziri Adio recently stated  that $715b was earned by Nigeria in 34 years (1981-2015) but unlike the UAE, Nigeria has little or nothing to show for the huge foreign exchange inflow.

However, by allocating funds from oil/gas for investment in  the agricultural sector (As UAE did by shifting funds from oil/gas from Abu Dhabi into trade and tourism in Dubai) Emefiele through the Anchor Borrowers program, seem to be quite visionary and so also is president Buhari whose farsightedness whose farsightedness convinced him to encourage the CBN to embark on the voyage of rejuvenating the moribund agricultural sector against the trend of public opinion.

In the thick of forex crunch a couple of years ago, Emefiele with the support of president Buhari prohibited 41 items from sourcing forex from the CBN with the justification that such items should be sourced locally through backward integration. And the policy threw up a fire storm of some sort from latter day economists and pundits, locally and internationally who questioned the efficacy of such ‘native’ wisdom devised by Emefiele and the apex financial institution owing to necessity.

Fortuitously, that highly reviled economic recovery strategy tagged ‘Tooth Pick’ economy ostensibly because importation of tooth picks with forex from CBN which Emefiele saw as subterfuge by economic saboteurs and therefore exempted it along with 40 other  items from sourcing forex from the CBN, has become the economic elixir that our ailing economy needed.

Although, it made common sense then but it did not fit Western dogma or doctrine , so experts including those from the highly rated Economist and Time magazines of the U.K and USA respectively parodied the policy.

Like the rejected stone that later became the cornerstone of the house, the much condemned  ‘Tooth Pick’ policy is now providing the much needed shot in the arm that Nigerian economy needed to move out from the sick bay also known as recession into a state of financial wellness, widely referred to as economic buoyancy.

And with a legion of Nigerians returning to farming which is the number one job creator, the economy has no choice but to respond to the growth stimuli.

You can bet your hard naira that Emefiele did not get the ‘native sense’ that he has applied so far in stabilizing the naira and economy from the prestigious Harvard Harvard Business School, HBS but from the school of ‘Hard Knocks-a training  that can only be obtained from practical experience in the somewhat odd and unique Nigerian business environment.

But that is just one component of the string of policies being driven by the CBN in the bid to end the economic recession currently dragging the economy down.

The other component is the intervention in the SMEs sector, which according to Nigerian Bureau of Statistics, NBS is the second largest employer of labor after agriculture.

Although l’m not unmindful of the conventional wisdom which is that data is (more often than not)only authentic to the organization that creates it, at 46.54%, SMEs are believed to be contributing  about half of Nigeria’s GDP.

And that’s according to Enterprise Baseline Survey study conducted by Small And Medium Scale Enterprises Development Agency of Nigeria, SMEDAN with the support of German Development Agency.

At this juncture, to underscore the importance of SMEs, it is worth pointing out that it is an army of 50 million Chinese SMEs generating over 500 million jobs between 1980-2012 that leapfrogged the economy to the global economic powerhouse.

If the Chinese economic miracle, underscored by the benefits of empowering SMEs could be mirrored  in Nigeria via the ongoing  shot in the arm remedy being administered on the SMEs by CBN through easier access to finance leveraging the Collateral Bank initiate, it could stir up entrepreneurship, like the ongoing rice revolution.

And l won’t be surprised if on the occasion of Nigeria’s 58th independence next year, president Buhari once again eulogize’s the CBN and its governor, Godwin Emefiele for promises delivered.

Way back in June, l had written an article which was a tribute to the CBN governor titled “Godwin Emefiele: From Zero To Hero?”. It was published widely in both mainstream and online media platforms and it was based on his spectacular accomplishments amongst which is how he succeeded in stabilizing the Naira exchange rate-a task which had overwhelmed his predecessors.

I concluded the write up by noting that Emefiele seemed to be the lone performer of the present administration and wished there were a couple of others like him delivering on their mandate as that could have generated  enough points to earn a pass mark for the Govt in power.

Looking back, Customs & Excise boss, Hamid Alli and head of Federal Inland Revenue Service, FIRS Tunde Fowler are the other top executives with stellar performance in the current administration whose efforts could altogether bolster the chance of president Buhari being seen to be delivering on his promise of change.

I’m tapping Customs & Excise boss for the huge amount of arms and ammunition smuggled into the country that has been intercepted by the dept since he assumed office and the improved revenue collection as well as the FIRS helmsman for the policies he has introduced to ramp up tax collection nation wide which is currently at the highest level ever recorded.

I’m happy to note that after l extolled Emefiele as the unsung hero of president Buhari’s administration in the article earlier referenced, and some people scoffed at me, much the same way that Emefiele’s quaint but efficacious economic tactics and strategies focused on backward integration were parodied and derogatorily tagged ‘Tooth Pick’ economics when he unveiled them, the number one citizen of Nigeria, president Buhari has now validated my assessment of Emefiele and CBN by anchoring his regimes accomplishments mainly on the policies they were planned and executed by the apex financial institutions regulatory organization under Emefiele’s watch.

In other words, five months after l chronicled Emefiele’s proficiency as CBN governor in the article, president Buhari has more or less now endorsed my sense of judgement by rewarding Godwin Emefiele and the CBN that he leads, with a vote of confidence during his lndependent day national broadcast.

I would like to conclude this piece by highlighting a very poignant quote whose author l do not know but which is both Germaine and  fundamental to the point at issue and therefore instructive to public servants.

“I choose to live by choice, not by chance;To make changes not excuses; To be motivated,not manipulated; To be useful, not used; To excel, not compete. I choose self esteem, not self pity. I choose to listen to my inner voice, not random opinion of others”.

I suspect that the principles  espoused in the quote above might have been lurking in Emefiele’s mind as he labored to find the right mix of policies to fix the economy while navigating the very treacherous public service mine field where lots of booby traps had been laid up for him to trip off – a common phenomenon in Nigeria.

As things currently stand, Nigerian economy is yet to return to vibrancy as the gains that Emefiele’s policies and programs in CBN and which  president Buhari gushed about in his Independence Day broadcast are yet to fully manifest.

Nigerians would only heave a sigh of relief when the benefits of the policies start to percolate down or permeate all the strata of the society via abundance of rice at an affordable price , increase in employment, better quality of education,good roads and provision of adequate housing units as well as improved healthcare facilities amongst others.
But as the saying goes, the morning foretells the evening and based on the growth and development indices which have started sprouting, there are glimmers of hope in the horizon and a good reason to be optimistic.

This simply implies that the APC Govt of president Buhari which has more or less been described as barren in the past two years of being in the saddle in Aso Rock villa, is now manifestly pregnant with potential game changing events.

And like anxious family members of an expectant woman, Nigerians are hoping that sooner than later, the joyful cry associated with successful delivery of a healthy baby that would usher in happiness, also known as positive dividends of democracy would soon rend the air. Happy independence!

Onyibe, a development strategist, an alumnus of Fletcher School of Law and Diplomacy, Tufts university, Massachusetts, USA and former cabinet member of Delta state, sent this piece from Lagos.