Emefiele: Single Digit Credit No Longer Feasible as CBN Facilities Reached N8tn in 5 Years

James Emejo in Abuja

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said the single-digit funding enjoyed by businesses in the priority sectors of the economy over the last five years may be difficult to come by again amid a high inflationary environment.

The central bank governor also disclosed that about N8 trillion had been disbursed to priority sectors of the economy.

Speaking at the just concluded meeting of the Monetary Policy Committee (MPC) in Abuja, he said manufacturers in those sectors were “very lucky that they were able to take advantage of a low borrowing rate during a period of sustained low-interest rate regime”.

The CBN governor said it was presently impossible for manufacturers to access such a lower-interest regime, whereby loans were granted for as long as 10 years with a two-year moratorium.

Emefiele said: “There is no how; in my entire banking career, I have never seen that and I am not even going to assure anybody that this trend will continue particularly at this time when we are in a territory of high interest rate regime, it’s not possible.

“Unfortunately, we have attained the period of high-interest rate regime because of our stance to tightening. So, they are lucky they are holding on to those trillions of naira for them to rebuild their factories, and expand their factories at a time when they needed it.

“And God knows if we didn’t do what we did in the last five years by giving these intervention facilities to these companies for plant and expansion, I can tell you that now it would be difficult for them to raise it.”

He further said: “You can imagine a Dangote raising $18.5 billion during those same periods out of which even we at the central bank were able to grant about N125 billion for two years at single-digit interest rate.”

The apex bank boss stressed that the somewhat moderated growth recorded currently was even the result of some of the interventions carried out by the central bank in the recent past.

He also said that the decisions by the bank to raise the benchmark interest rate over the last year were yielding positive dividends for the economy.

He said, “We are convinced that the decisions we have taken are potent enough and we need to continue to take those decisions so we can achieve the desired objectives.”