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Charting course of labour with development financing

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CBN headquarters building

Economic growth and inclusive wealth can only be attained by a commensurate rise in national productivity. But the productivity level would always be subjected to the level of economic activities available and how the populace is actively engaged in them.

Ucha Nwagbo, an economist, averred that the wealth of a nation is closely linked to the labour. Of course, no economy is driven without increase in effective demand of the populace and effective demand cannot be achieved without employment, then the purchasing power.

The Secretary to the Government of the Federation, Boss Mustapha, in a chat with The Guardian, on the sidelines of the just concluded yearly meetings of the African Export-Import Bank in Moscow, Russia, also subscribed to the sentiment, saying that creating job opportunities through policies is associated to national wealth.

According to him, diversifying the country’s resource base would definitely create jobs and lead to increased economic activity that would culminate to the inclusive wealth.

Citing one of the nation’s agricultural initiatives pioneered by the Central Bank of Nigeria, he reiterated that the contributions of the scheme resulted in millions of jobs, adding that it is one of the ways the current administration has exploited to manage unemployment level in the country in the last few years.

“The second thing is the issue of diversification of the economy. We cannot continue to be dependent on oil. So, we need to diversify the economy and we have demonstrated it particularly in the area of agriculture.

“We grew the rice farmer population as a  result of the Anchor Borrowers Scheme from four million to over 12 million. Out of it, we were able to generate millions of Nigerians who have become millionaires overnight because government was strategic in its investments in that area.

“There are other aspects of agriculture that we are looking at now, like areas of animal husbandry, the value chain by the provision of processing plants, rice milling and the rest of it.

“There are so many things that we can do to make sure that our people prosper in their enterprises and create gainful employment for our budding youthful population. About 60 per cent of Nigerians fall within the age bracket of youths, and if you do not cater for them, you are just leaving a dynamite hidden somewhere, which will explode one day,” he said.

The CBN Governor, Godwin Emefiele, not only agreed to the sentiment, but has severally declared support for improved local capacity, spearheaded think-tank groups, formulated frameworks and enforced implementations of policies aimed at improving national wealth through job creation and increased productivity.

Emefiele, who just secured his second term of office, against all criticisms, has vowed to sustain development interventions, which ensures cheap financing to boost local production of priority goods in critical sectors of the economy, reduce reliance on importations, create jobs locally and increase income distribution.

The organised labour, which expressed gratitude to CBN for various interventions, noted that the lessons of the apex bank’s creative interventions were that of targeted support for development of different sectors of the economy, especially agriculture, textile and creative industry.

The National Executive Council member of the Nigeria Labour Congress, Issa Aremu, said the lesson from CBN interventions is that we need a new partnership and it is clear that the issues require multifaceted approach to create jobs and grow the economy.

The Labour leader, who made the observation at CBN’s sensitisation session with stakeholders in the Southwest, including labour unions, on the direction of the economy, in Lagos, commended CBN’s initiative in revamping the economy and called on the Governor to continue his developmental mission by ensuring that inflation rate falls to single digit level.

“With respect to textile sector, it is commendable that CBN is creatively financing the value chain. From the process of seedlings for the farmers, provisions of long time financing for drillers and spinners, there is no doubt that financing is one of the critical factor of the textile sector.

“Of course, we have seen this in the issue of Anchor Borrowers Scheme- rice production, so this is important. As good as these interventions by CBN are highly commendable, we are excited by the reappointment for second term of Godwin Emefiele.

“He has proved that beside the core mandate of the CBN- ensuring price and financial stability and appropriate interest rate, the bank can also script long term government financing. So, it is extremely commendable. But as good as these efforts are, CBN is doing it’s own side of the bargain, which is monetary policy- creating development financing, the fiscal authorities must also compliment the efforts.

“CBN cannot do much to stop smuggling. CBN has supported government to improve rice production, which is a good job. But by the time rice farmers get to the market and it has been overrun by smuggled rice, the same thing with textile, it may not make any difference. The Customs must complement the efforts of CBN in that respect,” he said.

Aremu said the country now needs the same kind of activism being witnessed with the apex bank in power, trade and investment and labour ministries, because they are the ones that would see how these efforts of CBN translate to more capacity utilisation in reopening of closed factories and creating of jobs.

“From the point of the organised labour, we are committed and are going to partner with CBN to make sure that all these creative initiatives are sustainable. Mr. President promised that 100 million jobs will be created in 10 years time. That’s quite remarkable and significant because the significant issue and crisis that we have is unemployment.

“CBN remains resolute to making sure that scarce foreign exchange will not be made available for those 43 items that Nigeria has comparative advantage. For me, that is the CBN contribution to making sure that jobs are created locally and we have seen it in the case of rice production.

“Today, millions of farmers are actively engaged in agriculture sector due to CBN intervention. You can imagine if we also get such intervention to open the textile sector to create 650,000 direct jobs. That will also make us to achieve another target. We need similar interventions in palm oil and tomatoes production. All those 43 items are enough to generate millions of job for our people.

“We want to assure that organised labour would support these efforts and Mr. President must make sure that capable and competent hands drive this agenda. Labour will continue it’s own support, because the key issues to this economy is productivity,” he added.

But Emefiele, has severally said that the drop in crude oil prices between 2015 -2017 marked a turning point for the economy and necessitated the need to develop policies and programmes that will drive productivity across key sectors of the economy, but mostly create employment and support price stability.

He said that the development interventions would be sustained because it ensures cheap financing to boost local production of priority goods in critical sectors of the economy, which reduce reliance on importations.

Listing the gains of the efforts made by the CBN in the past five years in monetary policy and development finance, Emefiele said: “In our foray into development banking, as at March 15, 2019, the CBN has committed a total of N171.35 billion in the Anchor Borrowers Programme, with active participations across 36 states of Federation and Federal Capital Territory.

“A total of 920,788 farmers have benefitted in the programme, cultivating about 960, 643 hectares of land across 16 different commodities. Given the success achieved under this programme, CBN would continue to support it until the full potential is reached,” he said.

On tomatoes, he said CBN’s intervention in its production currently stands at a little above N10 billion in eight projects, with one of them being Dangote’s greenhouse manufacturing project that has the capacity to produce 10 million seedlings in a month.

“This would be sold to about 5,000 out-growers that would grow and supply the tomato factory which commenced operations a few weeks ago with tomato fruits. The project has the capacity of generating one million jobs from supporting small holder farmers in tomato cultivation to paste, as well as save the economy over $250 million yearly.
 “Still, the bank established the Investors and Exporters’ Window; conserved foreign exchange through the restriction of access to foreign exchange on 43 items; and increased lending to the agricultural and manufacturing sectors, to ensure financial system stability and the promotion of sustainable economic development,” he said.

Warning that the issues that led to the economic crisis between 2015 and 2017 remained visible, the bank stressed the need to remain alert to domestic and global developments, significantly increase the country’s policy buffers, including fiscal measures and external reserve profile.

He expressed optimism that the nation’s economy post-election will witness positive growth that will reduce the current level of unemployment in the country, based on the policy measures already instituted by the monetary and fiscal authorities.

According to him, the current measures would enable broad-based participation of farmers, textile workers and companies towards supporting the productive growth of the Nigerian economy.


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