Emefiele’s Development Finance Initiatives: When Government Cuts Its Nose To Spite Its Face

By Felix Oguejiofor Abugu

Cutting off one’s nose to spite one’s face is a popular expression used to describe “a needlessly self-destructive overreaction to a problem,” according to Wikipedia, which further explains that when one is cautioned against cutting off one’s nose to spite one’s face, “it is a warning against acting out of pique, or against pursuing revenge in a way that would damage oneself more than the object of one’s pique.”

A variant of it in Nigeria’s political parlance is the expression popularized by the late Arthur Nzeribe, the Oguta, Imo State-born strongman and political maverick, who once sneered at the seeming foolishness of his detractors undermining their own political interests by rejecting both his person and his message for the simple reason that they did not like him. “You can reject a person but not his message,” the later Nzeribe was to say.

We are also admonished against throwing the baby out with the bathwater. But in the ding-dong battle of wits between former CBN Governor, Mr. Godwin Emefiele and the President Bola Ahmed Tinubu federal Administration, it would appear that the latter just couldn’t be more excited at throwing the baby out with the bathwater! It is a shame that practically every development finance idea created by Emefiele’s CBN for purposes of job creation, expanded agricultural production, promotion of MSMEs, youth and women empowerment, expansion of the industrial base, diversification of the economy, credit guarantees and interest rebates, etc, has all but been discarded by Yemi Cardoso’s CBN for the simple reason that PBAT has obviously a personal axe to grind with Mr. Emefiele.

These schemes were designed by Emefiele’s CBN to provide cost-effective methods of improving access to finance and encouraging financial institutions to lend to specific sectors of the economy by reducing the risks associated with lending to the sectors, Now, the consequences of abandoning some of these CBN development finance schemes on, as already pointed out, rather petty grounds, are there for all to see, including the current unprecedented hunger ravaging the land. But who cares? All is well (the Administration’s spokespersons actually say that) with Nigeria, it seems, as long as the powers-that-be can take their pounds of Emefiele’s flesh to assuage their hurt by the foremost banker’s actions or lack thereof while he presided over the CBN as Governor.

Take the Anchor Borrowers’ Programme (ABP), for instance. Introduced in 2015 as a strategic 10-year (2015-2025) accelerated agricultural production plan, it came in response to the demand for increased agricultural outputs to feed the nation’s burgeoning population, stem rising food prices and imports while promoting exports.

Under the programme, a total of 4,590,039 smallholder farmers cultivating 6,135,150 hectares of 21 agricultural commodities were financed across the 36 states and the FCT.

The commodities – cassava, cocoa, cotton, fish, groundnut, maize, soya beans, wheat, cattle, sorghum, ginger, castor seed, sesame, tomato, yellow pepper, oil palm, cowpea and onion, among others – were financed through 23 participating financial institutions (PFIs), according to report on the scheme by the CBN.

One of Anchor Borrowers’ Programme (ABP’s) stellar successes is the contribution of 2 – 2.5 million metric tonnes of rice paddy annually to national output. In the same vein, the Programme has also supported maize production with 1,126,736 metric tonnes from financed projects across the country, in addition to the cultivation of 1,413,930 MT of cassava and the domestic production of its derivatives, namely ethanol, starch, sorbitol and HQCF.

The CBN Development Finance report further disclosed that the ABP equally contributed to increase in yield per hectare of maize and rice paddy from average 1.5 to 4.5 MT; cotton from 0.7 MT from 1.5 – 2.0 MT per hectare and wheat yield from 1 – 1.3 tons/ ha to 2.5 – 3 tons/ ha, among many others.

Yet, despite the foregoing glaring statistics, made even more credible by the dominance of locally produced rice in the Nigerian market and accentuated by the enchanting temporary rice pyramids displayed at the Eagle Square, Abuja in January 2022, aimed at showcasing the country’s efforts at boosting rice production and making Nigeria self-sufficient in food, the Cardoso CBN, at the behest of PBAT of course, has put the laudable project on hold. And the reason is simple: to spite Emefiele, a former CBN Governor whose naira resign policy implementation, shortly before the 2023 general election, then APC presidential candidate Tinubu publicly claimed was aimed at stopping him from winning the presidential election. Now president in spite of the alleged plots against him, PBAT appears unappeased until Emefiele is dragged in the mud, completely humiliated, along with the country itself, for daring to implement a national currency policy of the government under which he served at the time as Governor of the Central Bank of Nigeria.

We recall how PBAT arrogated so much to himself when he told the world, at the beginning of last year, that he regarded the naira redesign policy of the Buhari administration as a personal affront and plot against his (Tinubu’s) presidential ambition, with Emefiele leading the charge. Addressing a crowd of APC members and supporters at the party’s presidential campaign rally in Abeokuta on January 26 last year, the then APC presidential flag-bearer, Alhaji Tinubu, alleged that the fuel scarcity, which started in October 2022 and was still wreaking havoc in the country three months after, and the naira redesign policy of the Buhari administration were artificially created to discourage people from voting for APC thereby denying him victory in the February 25, 2023 presidential election.

“If you like, increase the price of fuel, hide the fuel or change the ink on the naira notes, we will win the election…They are full of mischief…let the price of fuel continue to increase, they are the ones that know where they are hoarding it. They are hoarding naira notes…if you like, change the ink in the naira note, we will win the election, the opposition will be defeated,” Tinubu boasted then. And as it turned out, he ‘won’, despite the seeming ‘odds’.

But, from when he made that assertion to when he ‘won’ the February 25, 2023 presidential election to this moment, Tinubu appears to have visited his anger against the ‘powers that be’ that wanted to stop him from being elected president of Nigeria, on Godwin Emefiele, the CBN boss who implemented the naira redesign policy of the Buhari administration. And for that reason, nothing Emefiele did as CBN Governor is good, not even some of the laudable development finance projects initiated by the CBN under his watch to increase food production and ameliorate the incidence of hunger in the land.

Consider another of the development finance projects of Emefiele’s CBN – the Commercial Agriculture Credit Scheme (CACS). According to a CBN report on the project, CACS was designed to fast-track development of the agricultural sector of the Nigerian economy by providing credit facilities to commercial agricultural enterprises at a single digit interest rate; enhance national food security by increasing food supply and effecting lower agricultural produce and product prices, thereby promoting low food inflation; reduce the cost of credit in agricultural production to enable farmers exploit the potentials of the sector and increase output, generate employment, diversify the revenue base, increase foreign exchange earnings and provide input for the industrial sector on a sustainable basis.

The scheme is to be managed by the CBN through the Board of Directors and the Committee of Governors, its guidelines further provide. And while the Committee of Governors is to be responsible for the overall administration of the Scheme, its day-to-day implementation lies with the Development Finance Department of the apex Bank which, for its part, would report to the Committee of Governors on all CACS issues.

And the CACS targets? To fund agricultural commodities and value chains thereby enhancing the production of cash crops such as cotton, oil palm, fruit trees, rubber, sugar cane, Jatropha Carcus and cocoa, among others.

With regard to food crops, CACS aims at increased rice, wheat, cassava, maize/soya, beans/millet, tomato and vegetable production. Poultry – broilers and egg and livestock – meat, dairy and piggery production is also top priority under CACS, in addition to aquaculture – fingerlings and catfish production. Processing, including feed mills development, threshing, pulverization and other forms of transmutation for value addition; storage facilities for commodities, agro-chemicals and warehousing; farm input supplies including those of fertilizers, seeds/seedlings, breeder stock, feeds, farm equipment & machineries as well as marketing of agricultural commodities under the focal investment areas, are amply captured in the CACS documents/guidelines.

The foregoing were all ongoing agriculture-related projects carefully planned and budgeted for and designed to achieve exponential increase in the nation’s agricultural output and stem food crisis, until the PBAT administration came and practically threw everything out the window on the grounds of their being the legacies of his ‘enemy’ Emefiele.

For, indeed, while the country hadn’t exactly become self-sufficient in local food production under Emefiele as the CBN Governor, the point must also be made that some of the projects under the CBN’s finance development schemes in relation to agriculture had delivered results that clearly demonstrated that, as conceived and midwifed by the apex bank, those schemes were, indeed, steps in the right direction.

The emphasis on the agriculture aspect of CBN’s finance development projects is deliberate. With the current food crisis rocking the country, there couldn’t be a better way to seek immediate solutions to it than examine any policy options or lack thereof that may have sparked the crisis. Obviously, the abandonment of some ongoing development finance projects that had put the nation on the path of abundant food production is partly to blame for the crisis.

This is not to say that we do not know that the rather impulsive, rash monetary policy options adopted by the Tinubu Administration on coming to power did the most damage. Of course, the hasty, even thoughtless floating of our national currency, the naira, in a non-production economy like ours, apparently just to differ from Emefiele’s CBN’s non-liberal forex policy, has contributed, perhaps more than any other policy, to the current mess. For the purpose of this argument, a peek at a part of the CBN’s Special Investigator, Jim Obazee’s report where he described some of Emefiele’s CNB’s projects as “fraudulent economic interventions”, is apposite.

And we will interrogate Mr. Obazee’s clearly ill-digested statement from one nonplussed writer’s point of view. Writing in a recent widely circulated article on the social media, the writer, a veteran of political reporting and columnizing, wondered just how exactly the restriction of access to forex for 44 products Nigeria can produce could be termed fraudulent.

“Why should Nigeria burn forex importing toothpicks, vegetable oils, tomato puree and such others? Why should CBN provide forex for the importation of food in 2023?” he queried.

“This is the policy Obazee describes as ‘fradulent’. We all have seen the naira fall like humpty-dumpty since this policy was reversed by this government. It is a fact that the naira has fallen by about 75 per cent since Emefiele was illegally yanked off his tenured position as CBN Governor.”

Emefiele refused to provide forex for the importation of food in 2023 because he was convinced – and there was enough evidence to that effect – that it was more economically and socially rewarding to consolidate on the achievements already recorded in food and commercial agricultural productions through the CBN’s financial development schemes, than to go back to the era of unregulated forex expenditure even on consumer food items that could be readily produced locally.

As they say, government is a continuum. A wise leader learns from his predecessor in office – either from his mistakes or successes. A leader isn’t expected to discard his predecessor’s initiatives already proven to serve the people’s interests merely because he does not like the person of his predecessor. The constant, remorseless harassment of Godwin Emefiele, immediate past CBN Governor and the creeping tendency to treat with contempt every laudable interventionist policy of the CBN under his watch, for the simple reason that the president of the republic nurses personal grudges against Emefiele, speak to a leadership style that promotes self over public interest. And it just isn’t right.

Let this government have a rethink. It must refuse to throw the baby out with the bathwater…going forward.

Before the food riots gather uncontrollable momentum, Governor Yemi Cardoso must retrieve ex-Governor Godwin Emefiele’s CBN’s financial development schemes documents from their dusty shelves, especially in relation to those schemes on food production, and run with the contents, even if he and boss PBAT just can’t stand Emefiele as a person. In the end, isn’t the nation’s survival more important than Emefiele’s destruction? I wager it is.

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