CBN retains benchmark rate, approves N798.09 billion for farmers

The Central Bank of Nigeria (CBN) has retained its benchmark rate at 11.5 per cent, and other key monetary policy parameters, as approved by its Monetary Policy Committee (MPC).

The CBN governor, Godwin Emefiele, announced this Friday after the MPC meeting that began Thursday. The policy rate is the rate at which the central banks lends to banks, which therefore determines the rate at which commercial banks lend money to businesses and individuals.

Addressing journalists at the end of the 2-day meeting of the MPC meeting in Abuja, Mr Emefiele said the committee voted to keep the policy rate at 11.5 per cent, with the assymetric corridor of +100/-700 basis points around the MPR.

The committee also voted to retain the Cash Reserve Ratio (CRR) at 27.5 per cent as well as the Liquidity Ratio at 30 per cent.

The committee noted Nigeria’s impressive 5.01 per cent GDP growth in the second quarter, and decelerating inflation that fell in August for the fifth straight month, and argued that holding the parameters will be a balance between boosting further growth and checking inflation.

Mr Emefiele, however, noted that headline inflation remained above the CBN’s target range of between six and nine per cent.

It noted the gradual recovery in economic output growth, and hoped the second quarter growth will be better.

Emefiele also announced that the sum of N798.09 billion has been released to 3.9 million smallholder farmers cultivating 4.9 million hectares of land across the country.

Out of this for the 2021 wet season farming, the Bank released the sum of 161.18 billion to 770,000 small-holder farmers cultivating seven commodities on 1.10 million hectares across the country.

In the statement signed by the CBN Governor, Godwin Emefiele, the Bank stated that, while harvesting for the 2020 dry season under the Programme is rounding up, harvesting activities have commenced for the 2021 wet season cultivation.

It explained that the Strategic Maize Reserve Programme of the CBN has been useful in moderating maize prices by directly targeting large feed mill producers.

“To support MSMEs across the country, the Bank disbursed N134.57 billion to 38,140 beneficiaries under the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), and for the Targeted Credit Facility (TCF), the sum of N343.21 billion has been released to 726,198 beneficiaries, comprising 602,730 households and 123,468 Small and Medium Enterprises”.

“Under the Real Sector Facility, the Bank released the sum of N1.00 trillion to 269 real sector projects, of which 140 are in light manufacturing, 71 in agro-based industry, 47 in services and 11 in mining. Under the Healthcare Sector Intervention Facility (HSIF), N103.02 billion has been disbursed for 110 healthcare projects, of which 27 are pharmaceutical, 77 hospitals and 6 other healthcare service projects”.

The Bank also informed that it has disbursed a total of N145.99 billion under its Non-Oil Export Stimulation Facility (NESF), just as it has revised the guidelines, working with Nigerian Export-Import Bank to improve access to the intervention and stimulate non-oil export growth in Nigeria.

Under the National Mass Metering Programme (NMMP), the Bank stated that N41.06 billion has been disbursed to ten (10) DisCos, for the procurement and installation of 759,7485 electricity meters”.

Under the Nigerian Electricity Market Stabilization Facility – 2 (NEMSF-2), the Bank also said it has released the sum of N145.66 billion to 11 DisCos as loans to provide liquidity support and stimulate critical infrastructure investment to improve service delivery and collection efficiency.

In furtherance of its intervention in the energy sector, the Bank stated that it has disbursed N39.20 billion to six beneficiaries to improve gas-based infrastructure to support the Federal Government’s Auto-Gas Conversion Programme.

The Monetary Policy Committee (MPC) met on the 16th and 17th September, 2021, on a relatively comforting note of a moderate global output growth recovery and improved global trade. Ten members of the Committee attended the meeting.

The performance of the global economy in the first two quarters of the year and into the third quarter, remained favourable with a positive outlook for the rest of the year.

According to the statement, in the domestic economy, output growth performance continued to improve, signposting the positive impact of the unwavering fiscal and monetary support by both the fiscal and monetary authorities to revive and sustain economic growth, post pandemic.

The CBN governor also explained why the Bank closed the account of Abokifx. He accused the website of collating the black market exchange rates of naira and carrying out an “illegal activity that undermines the economy”.

The CBN governor, Godwin Emefiele, said the publisher of platform, Oniwinde Adedotun, was involved in “illegal forex trading”.

The CBN has come under pressure in recent weeks after the value of naira plummeted following the bank’s decision to stop the sales of dollars to Bureaux De Change operators a month ago.

The value of the currency fell to 570 on Friday from less than 520 a dollar it traded before the ban. Most local newspapers rely on Abokifx for the parallel market rates.

Addressing journalists on Friday after the Monetary Policy Committee meeting that began Thursday, Mr Emefiele said the apex bank had been studying the activities of abokiFX in the last two years.

“There was a time we asked our colleagues to call the abokiFX to ask how he conducts the rates,” he said.

He alleged that Mr Adedotun lives in the UK and publishes arbitrary rates without contacting BDCs.

“He is a Nigerian, living in England, we will track him, Mr Oniwinde, we will track you.

“We cannot allow you to continue to kill our economy.”

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