CBN’s new financial instrument will fund private companies every 100 days
Nigeria’s apex bank, the Central Bank of Nigeria (CBN) on Monday announced the introduction of a new financial instrument known as ‘The 100 for 100 PPP’ Policy on Production and Productivity to boost local production and productivity in different sectors of the economy.
This disclosure was made by the CBN Governor, Mr. Godwin Emefiele, at the launch of the Central Bank Digital Currency (CBDC), known as the eNaira at the State House, Abuja.
A report by Nairametrics says the initiative by the apex bank is expected to provide support for selected private sector companies in the country as well as part of steps to reverse the country’s overreliance on imports.
Emefiele said the new policy will also be anchored in the CBN Development Finance Department under his direct supervision.
The CBN governor pointed out that the initiative was the best and most sustainable way to address the naira’s value whether in hard currency or digital eNaira through production, production and more production.
He said, “Working through banks, the financial instrument will be available to their customers in critical areas to boost the production and productivity and to immediately transform and jumpstart the productive base of the economy.
Emefiele explained that the policy seeks to advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with a new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.
“After these 100 projects by companies in the first hundred days from November 1, we will take the next 100 companies/projects for another 100 days beginning February 1, 2022, and then another 100 companies for another 100 days beginning from May 1, 2022.
”We believe that if we target and support the right companies and projects, we will see a significant, measurable and verifiable increase in local production and productivity, reduction in certain imports, increase in non-oil exports, and improvements in the FX-generating capacity of the economy.”
The CBN in the wake of the outbreak of the coronavirus pandemic and its devastating impact on businesses and the economy in general introduced various intervention programmes to help cushion its effect.
This involved disbursement of grants and credits to businesses and households at single-digit interest rates and sometimes at zero interest rates.
The World Bank had in June 2021, said that the interventions of CBN have helped Nigeria prevent severe credit crunch in the private sector.
This new policy from the apex bank will help improve the country’s non-oil export and foreign exchange generating capacity of the economy.