By Mathew Dadiya, Abuja
The governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele has disclosed that the private sector has agreed to mobilise a whopping N1.2 trillion to support the federal government in the development of critical infrastructure in the country to enhance economic development.
The fund, according to the CBN governor, will be raised through a Special Purpose Vehicle (SPV) working with the Federal Government, and key development finance agencies.
Speaking during a dinner on Wednesday night at the State House, Abuja for participants of the Going for Growth 2. 0 Roundtable Session, Emefiele said that the well-structured SPV, would be used to mobilize close to N1.2 trillion in funds from banks, pension funds and other financial institutions, to fund road, power, and port infrastructure.
He said that six key road projects and three seaport projects would be identified for funding.
”The framework for this SPV is currently being worked on and will be ready for implementation by October 2020.
”When implemented the SPV will help to reduce the burden of government financing of infrastructure projects and enable the government to focus on funding other priority areas. It will also reduce the cost of transporting goods across the country for farmers, SMES and Manufacturers. More importantly it will help improve our ability to attain double digit growth rates.”
The apex bank chief added that the participants at the event stressed the need for greater collaboration between the public and private sector in addressing some of the emerging challenges to growth.
According to him, one key highlight was the need to ensure that the Nigerian economy is self-sufficient in the production of key goods and services, as this would strengthen our buffers and insulate our economy from external headwinds.
He started that recommendations were also made on ways to improve broadband penetration in the country, which is critical in enabling Nigerians access the benefits that come with greater utilization of technological applications.
One area highlighted was the need to create a one- stop- shop that investors could interface with in order to reduce multiple taxation, he said.
He said that the participants noted the need for innovative financing schemes that require minimal collateral from farmers and SMES was key to improving agriculture and manufacturing productivity.
The central bank governor said that President Buhari’s acceptance to host the dinner at very short notice, was a reflection of the importance he placed to listening to the views of stakeholders in the Nigerian Economy, on ways to enable greater economic growth.
Emefiele recalled that in June 2019, the 1st Going for Growth Roundtable Session was held in Lagos where key stakeholders in the private sector shared their perspectives, on ways in which the Central Bank of Nigeria could help shape economic outcomes in the country.
“Some of these recommendations were useful in assisting the CBN design policy measures, which enabled the N1.9 trillion increase in credit to the real sector at low interest rates, between May and December 2019.
“Following the success of the 1st roundtable session, we decided to convene the 2nd session today, to further enhance your objective of driving economic growth. The second session is timely considering the external challenges countries across the world are facing, following the outbreak of the corona virus in December 2019.
“The corona virus has affected global supply chains in key markets and has resulted in significant reductions in the demand for goods and services by consumers. More importantly, the impact of the corona virus has led to a 45 percent decrease in the price of crude oil since the beginning of the year. It is expected that global growth would also drop in 2020.
“Given our dependence on crude oil for close to 80 percent of our export earnings and 50 percent of government expenditures, the drop affects the government’s ability to meet its capital and infrastructure funding objectives.
The roundtable was therefore an opportunity for stakeholders in the public and private sectors to share ideas on ways to strengthen our buffers and promote greater economic growth. Your Excellency Sir, during preparations for the roundtable, we expected only 50 participants, but to our great surprise over 400 people participated in the roundtable. This high level of attendance indicates the enthusiasm amongst key stakeholders in the private sector.”
The CBN governor said that the attendance by key ministers in the government also created an avenue for the private sector to listen to the government’s perspective on measures it was taking to address these challenges.