Mr Godwin Emefiele assumed office six years ago as the 10th indigenous governor of the Central Bank of Nigeria (CBN) and while building on his predecessors’ achievements, he has by no comparison brought novelties in Nigeria’s central banking operations to the admiration of even his acerbic critics.
Despite coming into office when Nigeria’s economic mainstay, crude oil price, had declined by about 60 per cent and then erroneously blamed for the subsequent woes ranging from a severely impacted economy. And for the first time in 25 years, a recession in 2015 coupled with the ensuing media feast about the depreciation of the Naira, and alleged criminal depletion of the country’s foreign reserves, the loaded Emefiele, a development banker with pedigree unknown to these critics, was prepared.
The unfazed Emefiele led-CBN management was of the belief that the apex bank should act as financial catalyst, targeting predetermined sectors that could create jobs on a mass scale and reduce the country’s import bills and dependence on oil.
He brought on board novelties similar to the 2006 Novel Prize winner in social business/social entrepreneurship model, Prof. Mohammed Yunus, former helmsman at Grameen Bank of Bangladesh.
Grameen Bank was a microfinance organization and community development bank founded in Bangladesh. It was also called the ‘bank for the poor’. The model was inspired during Bangladesh severe famine of 1974, when Yunus decided to make a loan of $24 billion to about nine million borrowers as start-up money to enable them produce items for sale without the burdens of high interest rate under predatory lending. He believed that making such loans available to a larger population could stimulate businesses and reduce widespread poverty in Bangladesh.
This model underscores Emefiele’s monetary policy initiatives which critics have tagged “unorthodox or toothpick” monetary policy in which he embarked on a series of developmental initiatives to create an enabling environment with appropriate incentives to empower innovative entrepreneurs, particularly the youths, aimed at driving growth and sustainable development.
It was thus a dream come true on July 21, 2020, when the CBN gave vent to a policy mooted in 2018 to operate non-interest loan windows in the country. Eleven non-interest Financial Institutions (NIFIs’) interventions schemes were born to increase access to finance, promote financial inclusion, create jobs and boost economic activities.
This novel policy under the purview of the CBN seeks to increase access to finance by banks or other financial institutions that conduct banking services, engage in trading, investment and commercial activities as well as providing financial products and services in accordance with Sharia principles and rule of Islamic commercial jurisprudence.
Emefiele had said that the interest-free loan will assimilate a large section of the population excluded due to aversion for interest and interest-based products into the financial system. Commendably, the policy targets 370,000 productive and energetic youth within the age bracket of 18-35 years in agriculture development scheme (ADS) which tops the intervention window to reduce unemployment.
The Agri-business, Small and Medium Enterprise Investment Scheme (AGSMEIS), an initiative of the Bankers’ Committee also made the list and support to government’s initiative on agriculture, micro, small and medium enterprises as vehicle for sustainable economic development and employment generation. The textile sector also got a slot, knowing that in the glorious economic era of Nigeria, the textile and garment industry was the largest employer of labour.
Other schemes that made the CBN intervention list include the N50 billion Targeted Credit Facility (TCF), the N100 billion Health Sector Research Grant, Real Sector Support Facility (RSSF), Creative Industry Financing Initiative (CIFI), and Non-oil Export Stimulation Facility (ESF).
These initiatives have been commended most especially by the president-general of Nigeria Supreme Council for Islamic Affairs (NSCIA), the Sultan of Sokoto, Alhaji Muhammad Sa’ad Abubakar, who has given the CBN a pat on the back and urged the Muslims community to apply and take advantage of the non-interest versions of the CBN intervention funds.
He noted that Muslims constitute over half of the country’s population, stating that the question of avoiding interest is non-negotiable as the majority of Muslims would opt to live in poverty rather than devour interests and face the wrath of their Creator.
He lamented that, for decades, Nigerian Muslims had been grossly marginalised in the growth-triggering financial interventions of the CBN and the country’s financial sector largely due to the interest element that is usually involved in the schemes. He also opined that without non-interest alternatives, the CBN can hardly attain its goal of 80 per cent financial inclusion earlier targeted for 2020, nor can any meaningful poverty alleviation and economic empowerment programme be actualised in the foreseeable future.
He, therefore, encouraged Muslims to optimally utilise the non-interest loan for the actualisation of productive purposes, by keeping in mind that this is not free money. For a Muslim, debt is an Amanah. Six years on the saddle, Emefiele has proven astute in turning Nigeria’s central bank into a model for development in order for other central bankers to emulate. His landmark strides at the bank do not come as a surprise because he foretold his mission by pledging to run a central bank that would spend its energy on building a resilient financial system that will serve the growth and development needs of Nigerians and Nigeria.
No wonder the Nigeria Senate without opposition gave their nod when President Muhammadu Buhari sought their approval for his nomination for a fresh five-year term.
–Joy Nguri writes from Numan, Adamawa State.