Boosting Local Productivity Through CBN “100 For 100 PPP Initiative”

In October 2021, the Central Bank of Nigeria (CBN) introduced a new financial intervention window tagged: “100 for 100 P-P-P” to support companies and the nation’s economy.
The facility, Policy on Production and Productivity was launched to empower 100 local companies in 100 days, and many hundreds in months ahead, with the aim to boost their production capacity, create wealth and stave off importation which has been responsible for foreign exchange crisis.
Despite the continuous government efforts to boost local production capacity in recent years, Nigeria still spent a whooping sum of N1.9 trillion importing food in 2022.
A total of N1.9 trillion worth of food products were imported into the country in 2022, indicating a five percent rise compared to N2 trillion spent on food importation in 2021, data from the National Bureau of Statistics trade report has shown.
The imported food products accounted for 7.29 percent of the country’s total imports for the year.
In 2020, Nigeria imported N1.2 trillion worth of agricultural products for the year. In 2019, the country imported N959 billion worth of food, accounting for 5.66 percent of total imports. It imported N857.6 billion and N886.8 billion worth of food products in 2018 and 2017 respectively.
The CBN 100 for 100 P-P-P initiative was therefore, a move intended to reverse the country’s over-reliance on imports.
The apex bank has launched several initiatives in recent years to support private sector in Nigeria, as it battles an importation-fuelled foreign exchange crisis.
These interventions include the N1.0 trillion Real Sector Facility (RSF), Real Sector Support Facility (RSSF), Anchor Borrowers’ Programme (ABP), Commercial Agriculture Credit Scheme (CACS), Non-Oil Export Stimulation Facility (NESF), and Textile Sector Intervention Facility (TSIF).
Speaking at the launch, the CBN Governor, Mr Godwin Emefiele said, “over the past seven (7) years, the government under the visionary leadership of President Muhammadu Buhari has made significant efforts at reducing our economy’s over-reliance on imports for food and industrial raw materials, towards one that is self-sufficient and self-reliant, with strong commitment towards ensuring that Nigerians produce what they eat and eat what they produce.
“In line with the administration’s policy focus to stimulate domestic production and productivity, the CBN has continued to introduce various policy measures, in the form of interventions, to stimulate low-cost and sustainable financing to priority sectors and segments of the economy.
“The 100 for 100 Policy for Production and Productivity (PPP) is one of such interventions designed to fast track productive activities in priority sectors”, he said.
Going by the plan, 100 private sector companies with projects that have the potential to significantly boost local productivity and the foreign exchange generating capacity of Nigeria were selected in November 1, 2021 by the CBN.
CBN said, the projects must catalyse sustainable employment-led economic growth through increased domestic production and productivity in the near term, adding that the instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to an independent evaluation by international audit firms”.
Again, according to the plan, the process which is bank-led, is rolled over every 100 days (on quarterly basis) and new set of companies is selected for financing under the initiative.
CBN launched the policy with the presentation of commemorative cheques worth N23.2 Billion to 28 beneficiaries, through seven Participating Financial Institutions (PFIs).
Presenting the cheques to the beneficiaries, which comprised 14 companies in the manufacturing sector, 12 in the agricultural sector, and two in the healthcare sector, at the Bank’s head office, Mr. Emefiele disclosed that the 100 for 100 PPP was designed by the CBN to stimulate investments in Nigeria’s priority sectors with the core objective of boosting production and productivity.
According to him, the formal launch of the 100 for 100 policy for the Scheme’s developmental component underscored the critical roles in building new blocks for economic growth, improving production expansion, reducing reliance on imports and fostering growth on non-oil export, particularly as the country’s national growth was highly dependent on a strong and competitive businesses.
He explained that, “under the initiative, every hundred days, manufacturers in critical sectors that seek to engage in greenfield projects or in expanding their existing facilities will have access to cheaper forms of credit at single digit rates, as well as foreign exchange to procure plants and machineries.”
While noting that the programme had the potential to significantly accelerate manufacturing output, promote further diversification of the economy and enable faster growth of Nigeria’s non-oil exports, Emefiele expressed confidence that the PPP will help to reduce the country’s over-reliance on imports, and stimulate productivity in agriculture, healthcare, manufacturing, extractive industries, logistics services, trade-related infrastructure, and renewable energy.
Specifically, he said, the scheme aimed at creating more than 20,000 jobs and expected to generate over US$125.80 million in foreign exchange earnings.
Speaking further, he explained that only 79 out of an initial 243 applications valued at N321.06 billion spread across key sectors of the economy, were submitted by the banks, out of which only 28 companies with projects that had clearly articulated proposals were eventually selected for funding valued at N23.20 billion.
He said, “the launch also fulfills the commitment we made during the unveiling of the first central bank digital currency (CBDC), the eNaira, by His Excellency, President Muhammadu Buhari GCFR, on the 25th of October, 2021, when we announced that the CBN will introduce a 100 for 100 – Policy on Production and Productivity (PPP), under which eligible companies in priority sectors will be screened and 100 companies will be selected to receive funding from the CBN every 100 days, beginning from 1st November 2021.
“The selection of subsequent beneficiaries will be rolled over every 100 days with new sets of 100 companies and details of these companies will be published in the major national dailies.
“Today’s launch of the 100 for 100 Policy for Production and Productivity (PPP) initiative and cheque presentation to selected companies, is a culmination of our engagements with critical stakeholders in the manufacturing sector and financial institutions, as we have here today pioneer beneficiaries of the initiative and the participating financial institutions”, he said.
Also speaking at the launch, the Minister of Labour and Employment, Dr. Chris Ngige lauded the CBN Governor for what he described as laudable initiatives, which he said aligned with the Federal Government’s goal of creating jobs and lifting people out of poverty.
While noting that the Nigerian economy was yet to be fully diversified, Dr. Ngige sued for greater collaboration between the fiscal and monetary authorities, noting that such partnership was vital to ensuring economic growth.
Speaking on behalf of the Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, the Permanent Secretary, Ecological Fund Office, Dr, Habiba Lawal said, the ingenious initiative was coming at a time the country was exploring means of economic diversification aimed at reversing its overdependence on importation as well as galvanizing local production of goods and services that would trigger employment generation, wealth creation and poverty eradication.
In their separate remarks, the President, Manufacturers Association of Nigeria (MAN), Dr. Mansur Ahmed and the Managing Director, Access Bank Plc, Dr. Herbert Wigwe, who doubles as the Chairman, Body of Bank Chief Executive Officers (CEOS), commended the initiative and pledged their readiness to collaborate with the CBN to ensure its success.
As expected, the initiative has received wide commendations from some notable financial experts within the country as captured by NAN.
A financial expert, Mr. Okechukwu Unegbu, commended the apex bank for thinking outside the box to salvage the Nigerian economy from its over-reliance on crude oil receipts.
He urged beneficiaries to ensure that the funds were judiciously utilised to achieve the purpose of boosting the productive sector of the economy.
“The CBN has made commendable efforts to encourage the manufacturing sector and economic diversification in recent times and this policy is another one.
“The realisation by fiscal and monetary authorities, that it is imperative to move the country away from dependence on crude oil to the productive and manufacturing sector is encouraging.
“I urge beneficiaries of this policy to ensure that the funds are used for the purpose for which they were allocated, while the CBN should ensure strict oversight and monitoring to ensure compliance,’’ he said.
Mr. Ibrahim Aliu, a Chartered Accountant, advised the apex bank to take stock of its recent economic policy decisions to determine their level of success.
“The CBN has introduced many policies in recent times aimed at diversifying the economy and stabilising the Naira. It is not just enough to introduce these policies.
“The apex bank needs to take stock, do an appraisal to determine the level of success of existing policies before initiating new ones,’’ he said.
An economist, Mr. Joseph Adebayo, also called for effective monitoring of beneficiaries of the policy to ensure that the funds were not diverted.
“Many Nigerians believe that government money is free money. I hope the CBN has adequate modalities to monitor the 28 enterprises and their usage of the N23.2 billion loan,’’ he said.
The funds were disbursed through FCMB, Fidelity, Keystone, Stanbic IBTC, Union, Wema and Zenith.