By Suleiman Umaru
This is not the best of times for Nigerians and Institutions promoting special programmes that will carter for the neey across the 36 states of the Federation and Abuja, the Federal Capital Territory, FCT, with the believe that the Federal Government will support it will be disappointed.
This because of the mismanagement of the funds of the National Social Investment Programme, NISP, an agency under the ministry of Humanitarian Affairs and Poverty Alleviation between 2015 and now by Hajia Sadiya Farouq , immediate past ministry of the ministry that was created by former President Muhammadu Buhari abd Beta Edu, her successor, who has been suspended from office by President Bola Ahmed Tinubu, who incidentally was a former governor of Rivers state .
Former President Buhari, may have shown his deep interest in NSIPA by providing it with adequate funding. Hajia Farouq, the immediate past minister of the ministry of Humanitarian Affairs, Disaster Management and Social Development, now ministry of Humanitarian Affairs and Poverty Alleviation, had r evealed that that Buhari’s government spent $1 billion annually , on the NSIP ,meaning that for the eight years of his administration, $8 billion was dolled out to the agency but nothing to show for it.
This may have informed why the Tinubu’s government has taken the bold decision that it will no longer be involed in direct development finance interventions on special programmes. Olayemi Michael Cardoso, governor of Central Bank of Nigeria, CBN, may have spoken the mind of the Nigerian President when he stated that the new policy is an indication of the road has come for the various government intervention programmes initiated b he Buhari’s Administration which include : the Anchor Borrowers Programme, ABP, the 100 for 100 Policy on Production and Productivity, PPP, the Real Sector Facility, RSF, the Nigeria Electricity Market Stabilization Facility amongst other , which over the years had been a drain pipe.
The CBN , governor , may have shocked Nigerians when he disclosed recently that in three years, the Buhari’s Administration had had spent N9.71 trillion to fund the programmes, across the 36 states of the Federation and FCT .
Recall that Godwin Emefiele, the embattled former governor of CBN, whose wife and three others who have been declared wanted by the Economic and Financial Crimes Commission, EFCC, under the close watch of Ola Olukoyede, over alleged N99.8 million contract for the refurbishment of a section in the cbn governor’s residence in Lagos, had said that a total sum of N109 trn was disbursed to the local rice farmers throw the ABP since its inception in 2015.
Cardoso, who could not hide his feelings had said that funding of such Development programmes had been such the lines between the apex Bank monetary policy and fiscal policy measures are blurred
It was not surprising why the country’s Financial Regulator, which has the backing of the President in refocussing on its core mandate had encouraged it to pull the Bank back from direct development finance interventions into more limited advisory roles that would support the nation’s economic growth.
Giving an insider information of the apex Bank’s advisory roles, the CBN , helmsman had said that the Bank would be acting ‘’a catalyst in the propagation of specialized institutions and financial products that support emerging sectors of the economy, and facilitate new regulatory frameworks to unlock dormant capital in land and property holdings.
With the CBN, which had deviated from its core mandate eight during the eight years of the Buhari’s Administration, refocussing its operations, by ending all its development finance interventions by the end of this 2924, fiscal year, Cardoso, the incumbent governor of the apex Bank had said that more than N4.6 billion farmers along with 1,358 prjects that had benefitted from the various initiatives will have to commence the repayment of the over N5.25 trn loans given to them by the regulatory Authority over under Emefiele Leadership. This is bad news to the local rice farmers who had accessed loans from the ABPfunds over the years without thinking of its repayment to the CBN, until the Buhari’s Administration elapsed, on May 29, 2023.
While CBN Authorities which have the mandate of Tibubu, to block all areas of revenue leakage to the government which was said to have resulted in the apex ban taking a firm decision not to be involved any longer in intervention in development finance projects, may have informed why it has moved to improve the value of the naira against the North American country of the United States , US, dollars and other world major currencies in the country’ foreign exchange market, both at the Autonomous and Parallel , popular, Black markets.
The CBN, Leadership was said to have moved a step further to initiate significant reforms in the county’s forex market , signaling a stride towards a market-driven exchange rate mechanism , thus paving the way for a three float of the local currency. This is evident with the removal of the caps on international money transfer operations.
The apex Ban most recent circular, was said to have outlined pivotal changes in the country’s foreign exchange operations, including the discontinuation of the cap on the spread in interbank forex transactions and the lifting of the restrictions on the sale of interbank proceeds.
Informed sources told The Value News that under the new foreign guidelines, transactions will operate on the basis of ‘’a willing buyer and a will seller’’, which many believe would ensure more flexibility in the exchange rate determined by market forces. This clearly shows that that the Nigerian government has successfully unified both the official and parallel exchange rates markets, which had been one of the policy thrusts of the Tinubu’s Administration.
Pa Utomi, a Professor and founder of Lagos Business School, LBS, located the nation’s Financial and Commercial city, had said that the CBN new forex reforms may not have much significant impact on the economy’’ because entrepreneurship and technology have made to such that the US dollar is not coming to Nigeria as expected due to the many changes in the country‘s forex operations, described as ‘’wrong’’ by financial analysts like putting the cap on the exchange rate at AFEM.
There is no gain saying the act that for many years, Nigeria has depended on foreign exchange sent home by Nigerians in diaspora, who are significant part of the economy as it leads to an inflow of forex into the country.
Notwithstanding the fears of the likes of Prof. Utomi, to the implementation of the CBN, new forex guidelines, analysts are optimistic that with the removal of the cap on forex sales at AFEM and giving the Deposit Money Banks, DMB, room to sell to willing buyers and buy from willing sellers, it will close the gap between the official and parallel market exchange rates market and further boost the ailing economy.
