According to the CBN boss, the manufacturing industry has been a key focus of the efforts by the monetary and fiscal authorities towards driving recovery of the Nigerian economy, following the downturn in the first half of 2020, as a result of the COVID-19 pandemic.
“At the Central Bank of Nigeria, we set up a N1 trillion facility in April 2020 for the growth and expansion of manufacturing firms in Nigeria. So far close to N400 billion has been disbursed to 76 manufacturing firms, which would boost local manufacturing across critical sectors over the next few years,” he said.
He said CBN’s efforts have aided the recovery of the manufacturing sector as reflected in the Purchasing Managers Index which shows that the index on manufacturing activities rose from a low of 42.4 points in May 2020 to 48.7 points in February 2021.
“While growth remains fragile, driving further growth of the economy would require that we continue to support more investments that will enable the growth of the manufacturing sector in Nigeria,” he said.
According to Emefiele, given Nigeria’s market size and population, the country offers significant advantages for multinational manufacturing firms that choose to invest in domesticating their productions lines in Nigeria.
“Not only do they have access to our large market, Nigeria can serve as a base for them to export goods to other markets in Africa. Our efforts at putting in policy measures to encourage improved production of made in Nigeria goods, is driven out of the need to create jobs and wealth for our growing population,” he said.
“The impact of a manufacturing plant also goes beyond its immediate environment, as it also enables the growth of SMEs that work to meet the needs of the manufacturing plants and the staff. This is in addition to the skills transfer gains that could be made when our people are able to acquire knowledge on new technological skills”.
Aside manufacturing, the CBN recently increased by 100 per cent, the N150 billion Targeted Credit Facility (TCF) being accessed by households and small and medium enterprises affected by the COVID-19 pandemic to N300 billion.
The expansion of the credit line, the apex bank said, was to enable it reach more households and small businesses raved by COVID-19 pandemic.
In a ‘Response by the Monetary and Fiscal Authorities to COVID-19’ report released by the apex bank, its Governor, Godwin Emefiele, said the TCF funds are already being disbursed through the NIRSAL Microfinance Bank.
He said that already, N149.21 billion has been disbursed to 316,869 beneficiaries adding that given the resounding success of this programme and its positive impact on output growth, the apex bank has decided to double it fund to N300 billion.
The TCF was designed to cushion the adverse effects of COVID-19 on households and small and medium businesses. The scheme was to support households and small and medium businesses whose economic activities have been significantly disrupted by the COVID-19 pandemic to expand their productive capacity through equipment upgrade, research and development.
The loan disbursements were based on the activity, cash flow, and industry size of the beneficiaries. Each eligible small business can receive a maximum of N25 million while qualified households can access a maximum of N3 million each.
“The increase is to to accommodate many more beneficiaries and boost consumer expenditure which should positively impact output growth. “Given the impact on COVID-19 on key economic variables earlier mentioned, the fiscal and monetary authorities took unprecedented measures to prevent any long-term damage to the growth prospects of our economy,” he said.
Continuing, he said the first objective was to restore stability to the economy by providing assistance to households and businesses that had been severely affected by the pandemic. In addition, the regulator sought to stimulate economy activity through targeted interventions in critical sectors such as agriculture, manufacturing, electricity and construction.
Continuing, he said there is one-year extension of the moratorium on principal repayments for CBN intervention facilities and regulatory forbearance was granted to banks to restructure loans given to sectors that were severely affected by the pandemic.
He said the CBN has also strengthened the Loan to Deposit ratio policy, which has resulted in a significant rise in loans provided by financial institutions to banking customers.
“Total gross credit rose by over 21 percent over the past year, from N15.5 trillion to N19.54 trillion. The apex bank, he added has also disbursed Agri- Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) (N92.90 billion to 24,702 beneficiaries), Anchor Borrowers Program (ABP) by the sum of N164.91 billion to 954,279 beneficiaries,” he said.