CBN, States And Job Creation

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President Muhammadu Buhari, in his third Independence Anniversary speech to mark the country’s 57th birthday, threw a lifeline to Nigeria’s army of job seekers when he announced a new presidential initiative that will mandate each of the 36 states and the Federal Capital Territory to create a minimum of 10,000 jobs. Again, the President placed the Central Bank of Nigeria (CBN) as the arrowhead of this lofty initiative that will entail the apex bank deploying its development finance capabilities all over again.

The CBN had done it before in the agricultural sector with astounding results. The President noted this in the same speech and commended the pro-active financial interventions of the apex bank which aided the diversification policy of the Federal Government. We recall that on assumption of office, the CBN Governor, Mr Godwin Emefiele, adopted a policy shift in response to the dictates of the prevailing circumstances in the economy. The country was bleeding as result of an unacceptable food import bills which became even more crushing with the dwindling returns in the nation’s foreign exchange earnings occasioned by the volatility in the oil market.

It is to be noted that the CBN, traditionally, is focused on monetary policy and financial systems stability. Moving into the other sectors of the economy became inevitable for its helmsman as a way of managing the scarce foreign exchange the heavy demand on which resulted in the crash of the nation’s legal tender-the Naira.

He made moves that attracted to him some knocks from few players in the economy. But buoyed by the courage of his convictions, he removed 41 items from the nation’s foreign exchange allocation list. In other words, if the importers of those items insisted on bringing them in, then they have to source their foreign exchange elsewhere. It wasn’t a popular policy thrust but one that was necessary at the time and still is. From the benefit of hindsight, it has turned out to be a right step in the right direction as it has facilitated the diversification of the economy in the area of local substitutes for the banned items.

Some of the areas that attracted Emefiele’s attention is agriculture, agri-business and agro-processing. The President, in his speech, commended the CBN’s Anchor Borrowers’ Programme launched in November 2015 as an outstanding success. So far, the CBN, on Emefiele’s watch, has released N43.92 billion into the programme in collaboration with 13 participating institutions. In the process, 200,000 small holder farmers from 29 states of the federation have benefited. That singular CBN initiative has encouraged farming activity on 233,000 hectares of land, the  cultivation of eight commodities, namely Rice, Wheat, Maize, Cotton, soya-beans, Poultry, Cassava and Groundnuts, in addition to fish farming.

These initiatives by the CBN positively impacted on some states which hitherto pretended not to be aware of the huge potentials embedded in agriculture. Today, those states are producing, in commercial quantity, other crops like palm oil, rubber, cashew, cassava, potatoes in addition to the local production of fertilizer, a key component in the emerging agricultural revolution initiated by the CBN.  It is interesting to point out that to date, 11 blending plants with a capacity for 2.1 million metric tons have been reactivated.  Already, the country has produced more than seven million 50Kg bags of fertilizer since the Presidential initiative came on stream.

It is pertinent to note this singular policy have saved for the nation over $150 million in foreign exchange and N60 billion in subsidy. Fertilizer which use to be a political product has lost that allure as it’s price dropped from N13, 000 per 50Kg bag to N5, 500. It is not only in the agricultural sector that the CBN has impacted positively. It is on record that the apex bank is assisting the power sector as it grapples with the challenges of the unbundling of the nation’s behemoth, the Power Holding Company of Nigeria (PHCN).

However, we note with reservations that some states have still not seen the benefits of taking advantage of the CBN’s interventions in the economy, in particular, in agriculture which states like Kebbi and Ebonyi as well as others saw as a low hanging fruit. It is pertinent to point out, in our view, that there is no state in the country that is not strong in one agricultural produce or the other. What is needed on their part is the political will to do the needful to make the unemployed youths productive again.

In our opinion, with this fresh directive by the President on the creation of 10,000 jobs, those other states that have been lagging behind will see the imperative of coming forward to take advantage of the policy. They have only one thing to lose- youth unemployment. The Central Bank has so far proved to be a partner they can trust in the effort to generate sustainable jobs for the youth of this country. The time to board the train is now.