22nd January, 2014
As the tenure of the current Central Bank of Nigeria, CBN Governor, Sanusi Lamido Sanusi will soon end, and possi ble candidates to replace him are already emerging, the Performance of the CBN under Sanusi’s supervision has been applauded in some quarters. But its failure to revitalise the real sector significantly, which is one of Bank’s core mandates, subtracts a lot of marks from the bank’s ratings.
The CBN still boasts a poor scorecard at best in terms of putting in place appropriate measures to ensure a more articulate financial sector and a banking system that truly contributes to the development of the real economy.
The huge potential of Nigeria’s economy is yet to be unleashed with banks not being as relevant as expected in the race towards economic development. The policy thrust of the CBN towards growing the banks and also monitoring their input into the advancement of the real sector has been nothing to cheer. Till date, the CBN’s interventions towards the growth of the real sector appears to be merely paper based promises and announcements that have impacted little on the fortunes of the Small and Medium Enterprises, SME’s in particular, while even the few existing big manufacturers are stagnated by stifling interest rates.
Although the key priority sectors needing a boost are obvious to all and especially to the CBN, special schemes and funds that should be tailored to support and promote their growth are either not in place or yet to make the reguired impact. For instance, the 200 billion Naira Small and Medium Enterprises Credit Guarantee Scheme earlier initiated as a fast track to the growth of the crucial manufacturing SME’s sector of the Nigerian economy, to serve as guarantee for credit from banks, has to a large extent not been readily accessible.
The sector remains lean, being constantly starved of funds. The SME’s blame their plight on the ambiquous nature of the scheme, coupled with CBN’s lax monitoring of the whole process. Budding entrepeneurs have chased such facilities announced as being available only to realise that constraints in their way towards accessing such loans are practically insurmountable.
SME’s should be made aware of the schemes available to be tapped through the CBN. They should not be kept in the dark regarding CBN schemes and policies, denying them of opportunities to inject funds into their comatose enterprises. Public enlightenment towards this purpose should be stepped up beyond current levels.
Banking operations must be more properly structured towards increasing lending to the private sector and redirecting credit to the SME’s at single digit interest rates as it obtains in any country serious about real sector development.