The Governor Central Bank of Nigeria (CBN), Mr Godwin Emefiele Tuesday disclosed that banking system credit to the economy increased by 1.75 per cent to N43.67 trillion in February 2021 from N42.92 trillion in January 2021.
He attributed the growth to the ongoing broad-based monetary and fiscal stimulus to various sectors of the economy. Members voted to retain policy parameters with Monetary Policy Rate (MPR) at 11.5 per cent, Cash Reserve Ratio (CRR) at 27.5 per cent, and Liquidity Ratio at 30 per cent.
Speaking at the end of the 278th Monetary Policy Committee (MPC) meeting in Abuja, the CBN governor enjoined the Bank to maintain its current drive to improve access to credit to the private sector, while exploring other initiatives with the fiscal authorities to improve funding to critical sectors of the economy.
He noted that persistent inflationary pressure fuelled largely by the continued uptick in food prices, stressing that the Committee noted the Bank’s interventions to boost food production, particularly through its various Agricultural programmes.
According to him, other complementary measures included, increase in disbursement for the dry season agricultural programme to increase output, the adoption of high yield seeds to improve productivity and the adoption of harvested produce as a means of loan repayment, which has stemmed hoarding and the activities of middlemen and rent-seekers.
He said the establishment of the strategic grain reserves for staple crops has also helped in addressing the seasonality of agricultural commodities. The Committee noted that the Bank has disbursed funds under its various agricultural interventions towards improving food supply in Nigeria.
Emefiele stated that the Committee noted the disbursement of N107.60 billion to 548,109 farmers cultivating 703,619 hectares of land between a fourth quarter (Q4) 2020 and the first quarter (Q1) 2021 to boost dry season output in support of agricultural value chain development.
“Total disbursements as at end-February 2021 amounted to N1.487 trillion under various agricultural programmes, of which N686.59 billion was disbursed under the Commercial Agricultural Credit Scheme (CACS) and N601.75 billion under the Anchor Borrowers Programmes (ABP) to 3,038,649 farmers to support food supply and dampen inflationary pressures. Under the Targeted Credit Facility, the Bank has disbursed N218.16 billion to 475,376 beneficiaries, of which 34 per cent of beneficiaries are SMEs.
“Under AGSMEIS, N111.62 billion has been disbursed to 28,961 beneficiaries, 70 percent of which are in the agricultural sector. Under the Creative Industry Financing Initiatives mainly targeted at youths, N3.19 billion has been disbursed to 341 beneficiaries, of which 53 percent is to the movie industry”, according to the CBN governor,
He disclosed that under the National Mass Metering Programme, N33.45 billion has been disbursed to nine distribution companies for the procurement of 605,852 meters, while N89.89 billion has been disbursed under the Nigeria Electricity Market Stabilisation Facility (NEMSF 2) to 11 distribution companies to improve the electricity supply industry in Nigeria.
According to him, the MPC noted the performance of the Financial Soundness Indicators (FSIs) of the DMBs which showed a Capital Adequacy Ratio (CAR) of 15.2 per cent, Non-Performing Loans (NPL) ratio of 6.3 per cent and Liquidity Ratio (LR) of 40.5 per cent, as at February 2020.
“ On non-performing loans (NPLs), the MPC noted that the ratio remained above the prudential benchmark of 5.0 per cent and urged the Bank to sustain its regulatory measures to bring it below the prudential benchmark,” he explained.
He said the medium-term outlook for both the domestic and global economies indicate cautious optimism, stressing that it is premised on the expectation of sustained policy support and successful deployment of the COVID-19 vaccines around the globe and its effectiveness in ensuring herd immunity.