Business Post Contributor
By Sodeinde Temidayo David
The Central Bank of Nigeria (CBN) has expressed optimism that the country’s economy would soon begin to witness growth despite the huge threats posed by inflation.
For the past three months and this is giving the apex bank the confidence that the inflationary pressures will moderate in the coming months as output growth improves and the negative output gap closes.
At its fourth Monetary Policy Committee (MPC) meeting of this year held this week, the central bank said one of the major reasons these pressures would ease is its current interventions in various sectors of the economy.
The banking sector regulator said as part of its efforts to develop the nation’s economy, it has disbursed a N756.51 billion loan to 3,734,938 smallholder farmers for the cultivation of food items on 4.6 million hectares of land, of which N120.24 billion was extended for 2021 wet season to 627,051 farmers for 847,484 hectares of land under the Anchor Borrowers’ Program (ABP).
The CBN also said it has given N121.57 billion to 32,617 persons under the Agribusiness/Small and Medium Enterprise Investment Scheme (AGSMEIS), while 679,422 beneficiaries, comprising 572,189 households and 107,233 Small and Medium Scale Enterprises (SMEs) have received loans of N318.17 billion under the Targeted Credit Facility (TCF).
The bank said with carefully designed policies, inflation will go down faster, promising to use its existing administrative methods to rein-in inflation by the use of its discretionary Cash Reserve Ratio (CRR) policy to mop up liquidity from the banking system as the need arises.
But it raised “concerned about the broad level of insecurity across the country,” noting its impact on business confidence and overall economic activities.
The apex bank said the persisting insecurity in key commodity-producing areas was also worrisome, urging the federal government to intensify security surveillance in farming communities to ensure uninterrupted farming activities.
“The CBN will continue to release maize from its strategic maize reserve directly to feed-millers as part of its strategic response to address rising food prices and moderate the price of maize across the country,” it assured.
