CENTRAL Bank of Nigeria (CBN) Governor, Mr Olayemi Cardoso, says the bank cannot resume intervention programmes as N4.69 trillion from past schemes remains outstanding, severely constraining its ability to deploy non-conventional policy tools even when needed.
Speaking in Abuja on Tuesday after the two-day Monetary Policy Committee meeting, Mr Cardoso said the unpaid balance, which was part of intervention programmes initiated since 2010, had continued to weigh heavily on the bank’s capacity.
He noted that a review by the CBN showed total historical interventions of N10.93 trillion, of which 43 percent, or N4.69 trillion, had not been repaid.
“Since we assumed office, we have been able to pull back about N2 trillion,” he said, describing the outstanding amount as ‘humongous’ and a major constraint on fresh intervention activity. Continuing such interventions without repayment, he warned, could easily destabilise the economy, as it happened in the past.
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Cardoso said the CBN would instead focus more on its catalytic and convening role, encouraging private-sector players to drive innovation and development. He stressed that moral hazard was a significant concern, noting that, “If you take money, it is money to be returned. It’s not something you take, pocket and walk away.”
He explained that withdrawing from direct interventions was unavoidable, but noted that the bank was working with other actors to design more sustainable support mechanisms. “We want win-win outcomes that make meaningful impact without repeating past mistakes,” he said.
Embattled CBN Governor, Mr Godwin Emefiele, provided a loan of about N1.12 trillion to 563 farmers through the Anchor Borrowers Programme (ABP). Emefiele-led CBN said about N670.4 billion was repaid, with an outstanding payment of N450.90 billion.
In 2016, Mr Emefiele made a presentation justifying why the bank needed to intervene in the economy. Speaking at a seminar for executive staff of the CBN, Mr Emefiele said: “It is no longer news that the CBN has, over the years, been directly or indirectly involved in the financing of growth-enhancing programmes and projects of the Federal Government. The involvement is incidental to the Bank’s core mandates and part of its development and corporate social responsibilities, to accelerate growth and development of the Nigerian economy. There are various schemes and programmes either implemented directly, in conjunction with the Federal Government or through specialised financial institutions.”
“In this regard,” he continued, “the Bank’s intervention initiatives encompass real sector programmes, particularly, agriculture, small and medium enterprises, infrastructure and youth empowerment. Notable among them are: the Commercial Agriculture Credit Scheme; Real Sector Support Facility (RSSF); SME Credit Guarantee Scheme (SMECGS); SME Re-structuring and Refinancing Fund (SMERRF); Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL); Power and Airline Intervention Fund (PAIF); Nigeria Electricity Market Stabilisation Fund (NEMSF); Anchor Borrowers Programme (ABP); Nigeria Textile Intervention Fund; and Non-oil Export Stimulation
Facility.”
Others, according to him, included Youth Innovative Entrepreneurship Development Programme (YIEDP); and Export Credit Rediscounting and Refinancing Facility. These initiatives have continued to impact positively on employment, food security, and power generation, transmission and distribution. All these are in addition to CBN’s Ways and Means Advances to the Federal Government.”
Attitude of borrowers
Several Nigerians who borrow from intervention funds often believe it is the national cake and they do not need to return them. In 2020, 70,000 Kebbi State farmers who got N17 billion from the ABP refused to repay it, saying it was their own share of the national cake.
One farmer in Kebbi said he had not benefitted anything from the Nigerian government since he was born, noting that he would never repay the loan that was extended to him. “What have I benefitted from the government as a Nigerian since I was born 55 years ago?” he asked. “I do not intend to pay back because it is my own benefit from the government as a Nigerian. You can drag me to court,” said the farmer, who received N4 million from the ABP scheme.
Another farmer said, “I was made to understand that it was free. So, I don’t have the money to pay back.”
