Emefiele: CBN’s Focus on Economic Diversification Yielding Dividends

*Says Nigeria now exports rice due to apex bank’s interventions

Eromosele Abiodun, Nume Ekeghe in Lagos and James Emejo in Abuja

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has stressed the urgent need to diversify the Nigerian economy into other areas other than oil, even as he disclosed that the diversification efforts of the apex bank have begun to yield results, especially in the agricultural sector.

Emefiele, who stated this yesterday at the 33rd Seminar organised by CBN for Finance Correspondents and Business Editors in Lagos, explained that the apex bank is already leading the drive towards the diversification from oil through its numerous interventions.
The conference, which was held simultaneously in Lagos and Abuja, had, “Policy Options for Economic Diversification: Thinking Outside the Crude Oil-Box,” as its theme.

The CBN governor, represented by the apex bank’s Director of Corporate Communication Department, Osita Nwanisobi, said the apex bank had supported non-oil sectors such as agriculture, manufacturing, healthcare, education, power and aviation, and other allied economic value chains, adding that these efforts have begun to yield positive results.

He said Nigeria had become a rice exporting country as the bank’s flagship Anchor Borrowers programme (ABP) had changed the long-standing dependence on imported rice.
He said the CBN had through its Agriculture Credit Scheme, supported commercial farmers in the country in different value chains, including oil palm, cotton, and cocoa, among others.

He said the implementation of 44 items prohibited from foreign exchange for import had revealed that the bank’s continued support to the manufacturing sector and MSMEs was yielding great results.
He also said the apex bank’s health sector intervention was beginning to reduce healthcare tourism, which according to him, was helping to conserve the country’s foreign exchange and improve the well-being of Nigerians
Emefiele said the quest for building a robust economy had remained the major component of the monetary policy.

According to him, Nigeria has largely depended on the oil sector for revenue generation over the past four decades.
He, therefore, said there was a need to build a broad-based and well-diversified economy that would guarantee overall macroeconomic stability.
“The quest for building a more sophisticated economy and agricultural, micro, small, and medium enterprises, industrial and manufacturing concerns has become the major component of our monetary policy.
“Nigeria has largely depended on the oil sector for revenue generation over the past four decades, and the sustained decline in crude oil production has continued to negatively undermine the performance of the economy.

“Thus, there is the urgent need for a conscientious effort to diversify to other non-oil sectors,” Emefiele said.
To achieve this, Emefiele, therefore, called on all arms of government in the country to urgently improve production and output to surpass population growth, which is pegged at over three per cent per annum.
He believed that doing so will help the country achieve macroeconomic stability.
“As I have often said, it is important that we work to create an economy that will enable us to feed ourselves, create jobs for our teeming youths, and improve the standard of living of our people.

He added: “The Central Bank of Nigeria, under my leadership, has taken major leaps to diversify the economy away from a largely oil-based economy through our numerous interventions. We have supported non-oil sectors such as agriculture, manufacturing, health care, education, power and aviation, and other allied economic value chains.

“You may recall that our flagship Anchor Borrowers’ Programme (ABP) that heralded the recent rice revolution in Nigeria has changed the long-standing dependence on imported rice as the country is not only depending on domestic production, but we have now become a rice exporting country. The Commercial Agriculture Credit Scheme (CACS) is a major special purpose vehicle to support commercial farmers in the country in different value chains including oil palm, cotton, cocoa, among others.”      

 
He further noted that the CBN’s continued support of the manufacturing sector and MSMEs have been yielding great results.
He stated, “Furthermore, the new 100 for 100 Policy on Production and Productivity (PPP), which is targeted at harnessing our local raw materials to increase our domestic production, as well as exports through our deliberate credit and other supports, will soon begin to yield quality results.

“Moreso, the RT200 FX initiative designed to take advantage of our large domestic production to other regional markets is targeted to increase foreign exchange inflows to the economy and support exchange rate stability. In addition, the ongoing work at the Dangote Refinery, when fully completed, will stop fuel importation just as we witnessed in the cement, sugar, and fertiliser market.”

He stated that the National Digital Economy Policy and Strategy (2020 – 2030), is poised to accelerate the private sector-led efforts toward building a nation where digital innovation and entrepreneurship are used to create value and prosperity for all.
He added: “Consequently, the Nigerian payment ecosystem has witnessed tremendous improvement over the years. To consolidate its efforts toward engendering a digital economy, the Bank deployed the eNaira, Africa’s first Central Bank Digital Currency (CBDC) in preparation for the payment landscape of the future, given the potential benefits that will accrue to a digital economy.

“The eNaira provides Nigerians with a cheap, generally accepted, safe, and trusted means of payment and seeks to enhance financial inclusion, support poverty reduction, enable direct welfare disbursement to citizens, support a resilient payments ecosystem, improve availability and usability of central bank money, facilitate diaspora remittances, reduce the cost of processing cash, and reduce cost and improve the efficiency of cross-border payment among others. Through the evolution of offline payments channels like agent networks, USSD, wearables, cards, and near field communication technology, the eNaira would give access to financial services to underserved and unbanked segments of the population.”
The eNaira platform, he added, also provides an innovative layer for products and services to be built to enhance the participation of Nigerians in the digital economy and promote further development of a burgeoning Fintech ecosystem.

“While celebrating the successes achieved following the launch of the eNaira and the global recognition of the great job on-going by the CBN, it must be acknowledged that the journey ahead requires cutting-edge innovation and out-of-the-box thinking to achieve the set-out objectives of economic diversification. Consequently, out-of-the-box solutions would be the ones that drive financial inclusion, SME growth, and the creation of start-ups; facilitate cross-border trades and transfers as well as international remittances and FX exchanges; ensure effective implementation of welfare-inclined government programmes and enhance efficiency in the interbank market,” he added. Similarly, Emefiele stated that the new 100 for 100 Policy on Production and Productivity, was beginning to yield quality results.

He also said the RT200 FX initiative designed to take advantage of Nigeria’s large domestic production to other regional markets, was targeted at increasing foreign exchange inflows to the economy and supporting exchange rate stability.
On digitalisation across all sectors, specifically in entrenching a resilient payments system, Emefiele said the bank had over the years established strategic initiatives and policies in the financial sector.

He named the strategies as the Payments System Vision 2020 (2007), National Financial Inclusion Strategy (2012 2018 ), Cash-less Policy (2012), Framework for Regulatory Sandbox Operations (2018 2021) Open Banking Initiative (2021), among others.
The apex bank governor said, as a result, the Nigerian payment ecosystem had witnessed tremendous improvements over the years.

He said, “to consolidate its efforts towards engendering a digital economy, the bank deployed the eNaira, Africa’s first Central Bank Digital Currency (CBDC) in preparation for the payment landscape if the future gave the potential benefits that will accrue to a digital economy.”