Manufacturers and agriculturists may finally be getting something that they have craved for a long time.
The Central Bank of Nigeria says that it will provide interest rates below 10 percent on special loans to these sectors. This plan was disclosed by the CBN’s Director of Banking Supervision, Mrs Tokunbo Martins, in Abuja yesterday following a meeting with bank executives. There are plans to make available ₦235 billion as special intervention funds to the manufacturing sector, as well as ₦750 billion worth of sector specific finance to agriculturists in Nigeria.
Mrs Martins said that the decision was reached that the funds were to be “disbursed to support primary agriculture projects and projects that are in core manufacturing”. She suggested that the thrust of the intervention would be the promotion of import substitution. What the Government seeks to achieve, according to the minister, is the preservation of scarce foreign exchange. Reducing the volume of imports into the country by strengthening local production capacity would keep more foreign exchange at home and prevent the naira from sliding further in the future.
Policy makers have, over the past year, introduced a raft of measures to halt the weakening of the naira currency against the dollar and other foreign currencies. Although the latest announcement by the CBN may indicate its desire to stay the course with its attempts at salvaging the local currency, it is hoped that the intervention will accomplish more than just that. It could be an initial spark of new life to the most important sectors of the Nigerian economy if the plan is executed as laid out.
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