The Central Bank of Nigeria (CBN) and banks, under the aegis of the Bankers’ Committee, Thursday said they have resolved to commence the disbursement of single-digit loans to the creative industry, some targeted cash crops, as well as to intensify their support for other operators in the non-oil sector.
The amount to be disbursed to operators in these sectors was put at N200 billion.
This is just as the committee reiterated that despite the concerns about the recently held general election, the country recorded foreign portfolio inflows (FPIs) of $6 billion in the first quarter of 2019.
The Director, Banking Supervision Department, CBN, Mr. Ahmed Abdullahi, said this Thursday at a media briefing at the end of the Bankers’ Committee meeting in Lagos.
Speaking on the increased FPIs inflows, Abdullahi said: “The Bankers’ Committee noted that lending to the private sector and the economy has increased and that is very positive news. Also confidence by portfolio investors has also increased. Between January and March despite the issue of the elections, $6 billion came in and that is positive news.”
Also, the Group Managing Director/Chief Executive of Access Bank, Herbert Wigwe, while speaking to journalists, said the committee would commence disbursement of funds for the creative industry.
According to him, the committee revisited the entitle value chain of music, movies, information technology and fashion, right from production facilities to capacity building, to ensure that whatever is produced is world-class.
“At the Bankers Committee, we got the approval to take it to the next level, which is simply to do a final presentation and share it with the market and how it’s going to happen. So by next week there will be announcement for people who want to participate in each of these segments.
“The specific amount will depend on which of the strata you fall into and what you are doing. The loans are for a maximum of 10 years, they are single-digit interest rate loans and reflective of the fact that in these industries, what you require is long term financing at single-digit; while we will ask for collateral it will be flexible,” Wigwe added.
On his part, the Managing Director of the United Bank for Africa Plc (UBA), Mr. Kennedy Uzoka, who spoke on the resolutions of the committee to enhance support for the real sector said: “The committee believes that we really haven’t made so much progress in this direction and subsequent to that, the committee set up a sub-committee and the sub-committee of members are those who have operated in continents where export have done very well. We have seen some countries that have similar products and have excelled in exporting while we have dropped.
“So, the question is, what are these countries doing that we are not doing? What are those things that are challenging us as a nation to diversify our economy from the standpoint of exports?”
He further added: “We interrogated this and worked with the different agencies of government across the continent and also we came back home to check what they have and we found out that indeed we have a lot of policies, but the challenge have been execution and we narrowed this down to seven broad areas.
“Typically, finance is one of the major challenges; we have policies, logistics -our ports don’t open weekends- and in terms of the policies that drive exports, we believe that a lot of them need to be changed.”
Alluding to the fact that funding was a major challenge, he said the committee resolved to focus on crops with near-term benefits.
He added: “Fortunately, CBN has different types of funds, so we looked at the existing funds so we don’t reinvent the wheel and so we looked at which of the funding can address the current challenges. We looked at some products with viability for export, and how it would help export, address employment issues, create necessary economic activities and create relieve in terms of foreign exchange.
“That is because if we add value to a commodity, we would create employment and that would save us foreign exchange, as against what we do today that most of our products are exported in raw forms. And we believe that with a little push, we can add a lot more value.”
He said the committee agreed to immediately focus on oil palm, cocoa, sesame seed and of course shea and cashew. “Based on the meeting we had today, we are going to be lending at single-digit, up to a maximum of 10 years and we are going to devote N200 billion to support this and that would change the narrative for export.”