The Central bank of
Nigeria (CBN) has so far disbursed N198 billion out of the N200 billion
power and aviation sectors intervention fund. Suleiman Barau, CBN
Deputy Governor, Corporate Services who confirmed this said the amount
has been released to the Bank of Industry for onward disbursement to
participating companies.
Mr Barau, who
represented the CBN governor at the second public lecture organised by
Kresta Laurel Limited in Lagos said the poor infrastructure base in the
country is of concern to the regulator, which is why it is intervening
in some critical sectors of the economy. “Infrastructure is not part of
CBN mandate but it impacts on our ability to deliver on our mandate. We
cannot achieve single digit inflation or interest rate when banks have
to provide their own power, and sometimes build roads. Our ability to
deliver on our core mandate depends on our ability to also settle
issues of infrastructure.”
Ability to deliver
According to Mr
Barau, the high interest rate, coupled with low deposit rate is
affecting the viability of Nigerian companies. “These things, one way
or the other, affects our ability to deliver the right monetary policy
framework for the economy to develop.” The CBN last year approved the
N500 billion intervention facility for critical sectors of the economy.
Out of the amount, N300 billion was earmarked for the power and
aviation sectors. The funds, which are to be channelled through the
Bank of Industry (BOI), is to be accessed through commercial banks with
a tenor of 10 to 15 years, at concessionary interest rate of not more
than 7.0 percent, and is designed to address some of the
infrastructural challenges of the real sector. The sum of N200 billion
was also approved for the refinancing and restructuring of banks’
existing loan portfolios to Nigerian small and medium enterprises and
the manufacturing sector.
In his speech read
on his behalf, titled, ‘Infrastructure, Industrialization and the
Nigerian Economy,’ the Governor of the CBN, Lamido Sanusi said the
dearth of infrastructure in the country has made it necessary for
government to engage the private sector in a public private sector
partnership (PPP). He said stability in the financial sector will also
engender infrastructural financing from the banks. “The future of
infrastructure development in Nigeria depends partly on the state of
the financial markets. Fiscal space for domestic public sector sources
of infrastructure financing is limited,” he said, adding that there is
need to explore the potential for accessing local and regional sources
of private financing in building Nigeria’s infrastructure.
No framework
He explained that
in the absence of framework for mitigating risks, there are commercial
and political risks that may affect the execution of infrastructure
project in Nigeria. “The CBN will continue to provide adequate support
to promote growth in the real sector of the Nigerian economy. The
ultimate goal of the CBN support is to establish a credible monetary
regime that will facilitate the attainment of key mandates of ensuring
price and monetary stability, promotion of financial sector soundness
and stability, production of goods and services which promote
sustainable economic growth and employment creation in the medium to
long term.” He said these factors are key in developing the critical
infrastructure that will take the country from where it is to where it
should be.
