The Central Bank of Nigeria (CBN) has developed a three-year policy plan to revive the economy.
CBN Governor Godwin Emefiele, who announced the measures on Tuesday, said the Policy Response Timeline will guide Nigeria’s crises management, and orderly rebooting of the economy by relying on homegrown solutions.
In a report titled: Turning COVID-19 Tragedy into an Opportunity for a New Nigeria, the CBN boss said the policy framework will come in three phases- immediate term policy of zero to three months, short-term policy priorities of zero to 12 months and medium-term policy priorities of zero to three years.
Emefiele said the outbreak of the Novel Coronavirus Disease (COVID-19) in China has rapidly permeated and profoundly changed the world. While the crisis is first and foremost a public health issue which has claimed the lives of over 123,600 people worldwide, and counting, the economic damages are unprecedented on several fronts.
He said the agricultural policies of the Federal Government are aimed at positioning Nigeria to become a self-sufficient food producer, creating millions of jobs, supplying key markets across the country and dampening the effects of exchange rate movements on local prices.
“That is why in response to COVID-19, the CBN is strengthening the Nigerian economy by providing a combined N3.5 trillion in targeted measures to households, businesses, manufacturers ad healthcare providers. These measures are deliberately designed to support the Federal Government’s immediate fight against COVID-19, to build a more resilient, more self-reliant Nigerian economy,” he said.
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“We do not know what the world will look like after this pandemic. Countries may continue to look inwards and globalization as we know it today may be dead for a generation. Therefore, as a nation, we cannot afford to continue relying on the world for our food, education and healthcare. This time has come to fully transform Nigeria into a modern, sophisticated and inclusive economy that is self-sufficient. Rewards the hardworking, but protect the poor and vulnerable, and can compete internationally across a range of strategic sector,” he added.
Achieving this, he said would require building a base of high quality infrastructure, supporting small-holder and large scale agriculture production, creating an ecosystem of factories, storages and logistic companies that move raw materials to factories and use of fiscal priorities to create robust educational system.
Emefiele said there would be no need to continually rely on the world for anything and everything at any time. He said now is the time for Nigeria to look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for the people.
“For a country of over 200 million people, and projected to be about 450 million in a few decades, we can no longer ignore repeated warnings about the dangers that lie ahead if we don’t produce locally, because the security and well-being of our nation is contingent on building a well-diversified and inclusive productive economy,” he said.
He said in 2014, Nigeria was importing fish, wheat and sugar with N1.3 trillion worth of foreign exchange from the bank. The pandemic, he explained, has more than ever before, made it imperative that we take control of our economy and future.
He said the immediate term policy of zero to three months reflects the government’s efforts at containment and mitigation of the COVID-19 pandemic.
He said CBN had responded in several ways, first by supporting hospitals and pharmaceutical industry with low interest loans to immediately deal with the public health crises; then by working with the private sector Coalition Against COVID (CACOVID) to support the Presidential Task Force across its response, while mobilizing palliatives for the poor and vulnerable.
On the short-term policy priorities, Emefiele said as soon as President Muhammadu Buhari and the Health authorities determined Nigeria’s Coronavirus Transmission Curve is flattening and many of the ongoing restrictions are eased, this will be the phase for repositioning the economic space.
“As part of the lessons from the current pandemic, we must ensure that that our value-added sector, the manufacturing industry, is strengthened. Accordingly, the CBN will pursue policies that will reinvigorate our financial support for the manufacturing sector by expanding the intervention all through its value-chain.”
“The CBN will promote the establishment of InfraCo PLC, a world class infrastructure development vehicle, wholly-focused on Nigeria, with combined debt and equity take-off capital of N15 trillion, and managed by an independent infrastructure fund manager. This fund will be utilized to support the Federal Government in building the transport infrastructure required to move agriculture products to processors, raw materials to factories, and finished goods to markets, as envisaged at the CBN Going for Growth Roundtable in March 2020,” he said.
On the medium term policy priorities of zero three years, the CBN boss said once things return to normal, and the Nigerian economy reopens fully for business, the CBN will act quickly to enable faster recovery of the economy by targeted measures towards particular sectors that are able to support mass employment and wealth creation.
“We will do so by focusing on four main areas, namely, light manufacturing, affordable housing, renewable energy, and cutting-edge research,” he said.
Emefiele said that in order to pursue a substantial economic renewal, including replacement of at least 25 per cent of the existing machinery and equipment for enhanced local production, there is an estimate of at least N662 billion worth of investments to acquire hi-tech machinery and equipment.
He said the current identification framework in the banking sector using the Bank Verification Number (BVN) will be used to verify the information provided by the off-takers before the developer can access the funds.
“We will also be considering ways to assist the Mortgage Finance Sub-sector as well as build capacity at the State levels for their land administration agencies to process and issue land titles promptly, implement investment friendly foreclosure laws and reduce the cost of land documentation, as this has remained a major inhibiting factor in the provision of affordable housing in the country.”