CBN Defends Policies, Responds to NESG’s Claims

CBN Defends Policies, Rebuffs NESG Claims

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Obiajulu Joel Nwolu is an established writer at africannewstoday.com. He is passionate about African affairs. He loves writing about interesting facts relating to the African continent and enjoys sharing his knowledge with others.

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The Central Bank of Nigeria (CBN) has defended its intervention programmes aimed at stimulating economic growth, saying it everted food crisis during the peak of COVID-19 lockdown.

This was stated in a statement by the CBN titled, “Re: Matters of Urgent Attention,” signed by its Director, Corporate Communications, Mr. Isaac Okorafor, which was in response to claims by the Nigerian Economic Summit Group (NESG), that its stimulus programmes were without policy clarity.

According to a statement released on Monday, NESG had alleged a huge loophole between food production and the needs of Nigerians despite the enormous sums disbursed by the CBN under its intervention programs.

The CBN, in its reaction defended its action claiming its intervention packages were channeled to sectors critical to improving livelihoods and reducing poverty, The Cable reports.

The statement read in part, “We are comforted by the NESG’s reluctant admission that many Central Banks around the world are also engaging in similar actions,” the statement read.

“It is important for the NESG to note that our intervention programmes in the agricultural sector were a key contributor to the resilience of the agricultural sector during the crisis, as
the sector experienced positive growth of 1.6 percent in the second quarter of the year despite the lockdown.

“As the NESG may be aware, as a result of the COVID-19 pandemic, Vietnam, Cambodia, India, and Thailand placed export restrictions on the exports of critical food items, including rice and eggs.

“With these disruptions, the Nigerian economy could have faced a major food crisis, but for the government’s intervention programmes in the agriculture sector.

“By alluding to the fact that money cannot address constraints in the agriculture sector, the NESG failed to realize that access to credit is listed among the three major challenges faced by farmers and businesses in Nigeria.”

The communique revealed that 103,189 Nigerians benefitted N59.12 billion through the NIRSAL Microfinance Bank as part of its development finance activity as of August 2020.

According to the CBN, in contrasts to allegations of its lending process lacking proper framework, it carried out due diligence of applicants before disbursements were given to beneficiaries.

It said, “The PFIs expend extensive due diligence on these intervention loans as the risk of default lies with them.”

The apex bank added that despite not being opposed to the reopening of borders, economic sabotage arising from the smuggling of commodities forms the rationale behind the closure.

It referenced the International Trade Centre as saying Benin Republic imports as much as rice as China and nearly as much frozen chicken as the United Kingdom.

“In which country does the NESG think all these rice and chicken end up? How then can a Nigerian rice farmer or poultry owner survive?” it said.

This post was written by Obiajulu Joel Nwolu.

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