Godwin Emefiele, CBN Governor
Godwin Emefiele, CBN Governor

A Coalition of Civil Society Groups recently organised a one-day advocacy workshop for opinion leaders and other relevant stakeholders aimed at fostering understanding in pursuit of sustaining economic development through diversification for our great nation, LINUS OOTA who was there, reports.


Participants at the one-day workshop organised by Coalition of Civil Society Groups, unanimously agreed that due to the failure of the oil sector to sustain the Nigerian economy, there was a need to support the present administration in propagating policies that will drive genuine change especially the current efforts to shift attention to agriculture and solid mineral sectors.
The workshop, held in Abuja, had as its theme: “Understanding the Economic Implications of the new CBN monetary policies and the role of Civil Society in policy Advocacy and economic development.”
Speaking during the workshop, President of the Coalition of Civil Society Groups, Etuk Bassey Williams, explained that the country was experiencing another critical stage in its national history, with sharp decline in oil revenue after a period of boom that saw price of crude oil rose to over a $100 per barrel in the international market.
Having failed as a country to learn from past mistakes due to our inability to diversify the country’s economy, ensure savings and prudent management of resources, Nigeria is once more grappling with its share of the aftermath of the oil price decline.
He said that with mounting pressure on the naira as a result of declining foreign exchange earnings, it is not surprising that the CBN as a matter of urgent necessity had to put in place some monetary policy measures to help stabilise the economy.
According to Mr. Williams, “Most notable is the recent foreign exchange restriction, which has attracted mixed reactions from various stakeholders. While some are of the view that the said policy would serve as disincentive to the Nigerian manufacturing sector and the economy, others on the contrary believes if effectively implemented, it would not only change the structure of the economy but will also resuscitate local manufacturing and expand job creation for our citizens.”
He explains that while Nigerians are stuck between the above two views, “it is imperative more than ever before that, in this period of enormous expectations from the present administration that, platforms such as the one provided today be fully harnessed to engage relevant stakeholders in order to establish a synergy that will help create an understanding on how these policy measures undertaken by government will help to drive the needed socio-economic development in this era of change.”
The president of the group however commended the present administration for being able to respond to the present economic challenges by reducing the over bloated cost of governance and plugging leakages through which monies were hitherto being siphoned.
“While the step so far taken are highly commendable, they may not be enough to tackle the enormous economic challenges presently being faced by the country. It is strongly recommended that the government should take a conscious, sincere and pragmatic steps in diversifying the economy with emphasis on the solid mineral sector which if properly harnessed is capable of generating in excess of what is currently being generated from crude oil.
“In addition, priority should be given to the growth of small and medium scale industries, which remain the engine of growth of any economy.”
He urged all the relevant stakeholders to use the opportunity of the workshop to support the present administration most especially in propagating policies that will drive genuine change.
Also speaking, CBN Director in charge of financial marketing, Mr. Emmauel Okeji, explain that agriculture was the major export of the country in time past, focus had shifted from the employment generating sector to oil.
However, the present decline in oil prices at the international market has made it imperative for focus to shift back to agriculture as a sector that not only generates employment but also grows the fortunes of the country.
He said that the importance of the agriculture sector to a country cannot be overemphasised, especially one like Nigeria where agriculture makes one of the biggest contribution to the GDP. Prior to the birth of the oil fortune, agriculture was contributing about 70 per cent of the GDP.
In the first quarter of 2013, the agriculture sector earned $106 million representing over 13 per cent on the country’s non-oil exports in the first three months of the year. Agriculture contributed more than 23 per cent to the Nations GDP and created about 65 per cent of job in the country in 2014.
Mr. Okeji, who represented the CBN governor at the workshop said that despite various interventions on the part of government in the agriculture sector, funding remains a major challenge in the country especially for farmers, due to the peculiar nature of the farming business.
He added that the present government has decided to approach the sector with a new policy focus as a measure economic base of the present administration.
Having in mind the essence of agriculture to the survival of the nation’s economy, CBN had come up with various ways of getting funds to farmers as well as those in the agric value chain.
Knowing the peculiar nature of agriculture and lending to the sector, the apex bank had come up with various vehicles that would see more financing for the sector. One of such funding vehicles is the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending, NIRSAL.
NIRSAL is a holistic approach aimed at de-risking agricultural lending through fixing of financing and commodity value chains in the agricultural subsector.
This is with a view to reducing the perceived high risky nature of agriculture harboured by bankers towards lending to this all-important sector of the Nigeria economy.
The NISRAL scheme emerged out of lessons from inefficiencies of the CBN’s past agricultural lending programmes, which yielded less to the farmers and the economy, as they were unable to unlock the kind of bank lending that was expected into the agriculture sector.
The scheme is an approach that tackles together the agricultural value chains and the financing value chain. The agriculture value chains and the financing value chain are interdependent.
The apex bank believes that in moving agricultural financing forward in Nigeria, fixing the financing value chain without addressing the agricultural value chains would be a futile exercise.
It breaks with tradition by doing three things at once. One is fixing the agricultural value chains, so that banks can lend with confidence into cohesive and complete value chains.
Secondly, it encourages banks to lend into the agricultural value chains by offering them strong incentives and technical assistance. It also engages in active market access development in partnership with key buying groups, states, private investors, farmer groups and processors.
According to the Governor of the CBN, time has come for diversification of the Economy by initiating an “Anchor Borrowers’ Programmed” that will address the issue of local production of agricultural products that depletes the Nation’s foreign reserves with the huge import of these items. These heavy imports include, rice, wheat, tomato paste, fish, textile and sugar.
He disclosed that the CBN refused to further devalue the naira because it would not have had direct impact on the country’s exports as a mono-economy adding that naira devaluation would lead to hyperinflation because when the import is higher, for the country that largely depends on importation, it would lead to increase in price of goods.
According to him, “The simple idea behind devaluation is that it will make your import more expensive while your export is cheaper, our major export commodity which accounts for more than 80 per cent of our income is crude oil and here is crude oil that the price is determined, we don’t have a control over it. So, if we devalue, it has no impact directly on our major export, and what is supposed to be the non oil export, we are not producing effectively.
“It means that for the industry which is also import dependent, they have to pay higher prices for those goods which will translate to higher inflation.”
Explaining what transpired between Nigeria and JR Morgan, Emefiele said, “What JP Morgan wanted us to do was to allow the exchange rate to be determined by market forces.
“For us as economists, it was going to be a little bit unpleasant, because we noticed what was happening in the market when trading was not actually placed on real effective demands.”

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