The Central Bank of Nigeria (CBN) has said that while the strides made in addressing constraints that continue to limit growth and development have received commendations, these are just a drop in the ocean, as the US$10 billion annual investment required for infrastructure development cannot be solely financed by the CBN.
Governor, Central Bank of Nigeria, Mr. Godwin Emefiele made this declaration over the weekend at the 30th Anniversary/2021 conference of the Finance Correspondents Association of Nigeria (FICAN) held in Lagos.
According to him, considering the importance of quality infrastructure to economic growth, the fiscal authorities and private sector have roles in the ecosystem, with innovative financing options explored.
He also said that lack of access to quality infrastructure has been a limiting factor to Micro, Small and Medium Scale Enterprises (MSMEs) in developing countries delivering on their potential for growth and creating employment.
Beyond infrastructure, Emefiele said access to finance remains one of the biggest threats to MSME development in both developed and developing economies alike, with serious implications for productivity, economic development and job creation.
Represented by the Director, Corporate Communication, CBN, Mr. Osita Nwanisiobi, the governor, in giving his keynote address, stated that the Sukuk bond market has provided a substitute for the traditional interest-based financing options and has been used to finance critical infrastructure projects across the country.
Also, Public and Private Partnership (PPP), he said, provides an alternative to finance infrastructure projects, thereby easing budgetary constraints and improving operational efficiency by leveraging private sector’s expertise and robust financing options.
His words: “This PPP option is yet to be fully explored in Nigeria, despite its popularity in other emerging economies, particularly Brazil and India.
“The conference, themed ‘Financing infrastructure & SMEs for inclusive growth in the post-COVID-19 economy’, provides an opportunity to share our experiences at boosting the economy by stimulating investments towards the development of small and medium enterprises (SMEs) and critical infrastructure in the country.”
He said Nigeria’s output growth remains on the upbeat, as the economy is on a recovery path following the roll-out of the COVID-19 vaccines, reopening of economies globally, as well as the implementation of the various stimulus packages by the fiscal and monetary authorities.
“The recovery was, however, largely driven by activities recorded in the non-oil sector, which has continued to grow”, he added.
In realization of the importance of access to finance and infrastructure to economic growth and development, the CBN, according to Emefiele, has taken steps beyond its traditional macroeconomic mandates of ensuring price and financial system stability, as well as maintaining a strong external reserve.
“To this end, the bank introduced several development finance policies and programmes to improve access to credit for MSMEs, deepen the bank’s support to the real sector, support job creation and build a robust payment system infrastructure to help drive financial inclusion.
“There is no shortage of effort at bridging sub-Saharan Africa’s infrastructure deficit, as annual public expenditure on infrastructure continues to increase with most governments in the region spending about six to 12 per cent of their GDP annually on infrastructure,” he stated.
He therefore commended the Finance Correspondents Association of Nigeria and felicitated with the association on the occasion of its 2021 annual conference and 30th anniversary celebration.
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