The Interest rate remained at 11.5% throughout the year, under the CBN’s centrist policy stance. As an alternative, the CBN adopted Heterodox Monetary Policy Broad Money Supply (M2) increased by N540.31 billion (1.41 percent) from N38,218.83 billion in March 2021 to N38,759.14 billion in June 2021.
The growth in M2 was mainly driven by the expansion in the Net Foreign Assets (NFA) and Net Domestic Credit (NDC). Net Foreign Assets increased by 8.42 percent (N566.26 billion) from N6,725.99 billion in March 2021 to N7,292.25 billion in June 2021. Similarly, Net Domestic Credit (NDC) rose by 2.19 percent (N950.48 billion) from N43,435.08 billion in March 2021 to N44,385.56 billion in June 2021.
The development in NDC was due to the expansions of Credit to Private Sector during the period under review. Credit to Private Sector increased by 3.81 percent (N1,197.27 billion) from N31,440.91 billion in March 2021 to N32,638.18billion in June 2021. Net Credit to Government on the other hand decreased by 2.06 percent (N246.80 billion) from N11,994.17 billion in March 2021 to N11,747.37 billion in June 2021. When compared to the level at the end of the second quarter of 2020, the broad money supply expanded by N6,307.74 billion (19.44 percent) in June 2021.
On the development financing front, the CBN’s Interventions continued largely in manufacturing/industries, agriculture, energy/infrastructure, healthcare, and Micro, Small, and Medium Enterprises (MSMEs). Under the Targeted Credit Facility, the Bank has disbursed a total of N363.49 bn to 766,719 beneficiaries, comprising 638,070 households and 128, 649 small businesses. Under its Agribusiness Small and Medium Enterprise Investment Scheme (AgSMEIS), the Bank has released N134.63 bn to 37,571 entrepreneurs.
Between September and October 2021, under the Anchor Borrowers’ Programme (ABP), the Bank disbursed N43.19 bn to support the cultivation of over 250,000 hectares of maize, sorghum, soya beans, and rice during the 2021 dry season; and N5.88 bn to finance six (6) large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS). Taken together, the Bank has disbursed the total sum of N864 bn to 4.1 million farmers, cultivating 5.02 million hectares. The bank also disbursed the sum of N41.2 bn for the commencement of the brown revolution, a large-scale wheat program to wean us off imports by 35 % in the first year.
Similarly, the Bank released the sum of N261.92 bn for 42 additional projects under the N1 tr manufacturing intervention. Cumulatively, the bank has disbursed the sum of N1.08 tr under this Scheme.
As part of its effort to support the resilience of the healthcare sector, the Bank disbursed N5.39 bn to Nine (9) healthcare projects under the Healthcare Sector Intervention Facility (HSIF). The Bank has also cumulatively disbursed the sum of N108.65 bn to hospitals and the pharmaceutical industry. 54 of the 117 projects funded are for hospital services. The committee was gratified that the funding under Health the sector has resulted in the establishment of two(2) new Cancer Centres, over 59 MRI and more than 42 CT Scan Centers in Nigeria, within the last 18 months
To further promote entrepreneurship development among Nigerian youth, the Bank recently approved the implementation of the Tertiary Institutions Entrepreneurship Scheme (TIES). The Scheme is designed to create a paradigm shift among undergraduates and graduates of tertiary institutions in Nigeria, from white-collar jobs towards entrepreneurship development. The guidelines for the implementation of the Scheme were recently published, as the Bank of Industry (BOI) is presently partnering with the Bank for the pilot implementation phase.
Under the National Mass Metering Programme (NMMP), N8.69 bn was disbursed to four (4) Distribution Companies (DisCos) under the scheme’s Phase-0. The sum of N47.66 bn has been disbursed so far for the acquisition of 858,026 meters. Also, in furtherance of its intervention in the energy sector, the Bank released N27.03 bn to power sector players under the Nigeria Bulk Electricity Trading Payment Assurance Facility (NBET-PAF). This is in addition to the N37.69 bn disbursed to eight (8) Distribution Companies (DisCos) recently, under the Nigeria Electricity Market Stabilisation Facility (NEMSF-2).
The Bank has disbursed the sum of N39.2bn under the Nigerian gas expansion program to promote the migration to compressed natural gas (CNG) as the preferred fuel for transportation and liquefied petroleum gas (LPG) as the preferred cooking fuel. Furthermore, the Bank recently introduced the 100 for 100 Policy on Production and Productivity (PPP), designed to create the flow of finance and investments to enterprises with the potential to kick-start a sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity in the country. It is geared to support private sector companies to reduce certain imports, increase non-oil exports, and improve the FX-generating capacity of the economy. The Bank will select and finance 100 such companies at 100-day intervals, in line with detailed selection criteria as contained in the guidelines and roll this over for another 100 companies for the next 100 days.
The Targeted Credit Facility (TCF) was particularly highlighted by the Committee for its contribution to alleviating poverty at the grassroots. The Committee thus urged the Bank to continue its support through the TCF to ensure that more people benefit from this program. Meanwhile, in a bid to increase liquidity in the fx market the CBN through a circular issued on the 5th of March introduced the Naira 4 Dollar Scheme which was meant to see International Money Transfer Operators (IMTO) pay an additional N5 for every US$1 remitted to the country the scheme was initially supposed to last till May 8, 2021. The policy which was later extended till further notice is calculated at reducing the effective cost of sending remittances, increasing their flow, and thereby creating liquidity in the fx market. The average cost of sending US$200 worth of remittance to Nigeria from the US was about 4.7%, citing studies the CBN governor claimed that a 1% reduction in the cost of remittances can lead to a significant rise in remittances
