Vice-President Yemi Osinbajo Monday blamed the Central Bank of Nigeria (CBN) for the delay in the disbursement of the structured-lending financing of the N2.3 trillion Economic Sustainability Plan, (ESP) which has slowed down its hugely significant impact anticipated across different sectors.
The Central Bank of Nigeria (CBN) structured the financing of some parts of the ESP for which a N200 billion debenture agreement was agreed and signed in April for the programme that was instituted to create jobs and safeguard existing ones during the thick of the Covid-19 pandemic.
The programme was initiated to put the economy on the path of sustainable growth in the government’s efforts to effectively tackle the fallout of the COVID-19 pandemic.
Months after the plans were laid out, financing from the CBN has been delayed, thereby frustrating the implementation of the programme that was planned to mitigate the effect of the Covid pandemic on Nigerians.
Some of the programmes that were denied of funding by the CBN are the Social Housing Programme, the Solar Power Naija and the Agric plan according to Vice President Yemi Osinbajo, who stated that the implementation of the ESP has suffered significant delays owing to the actions of the apex bank.
Osinbajo’s concerns were some of the highlights from Day one of the two-day Mid-Term Ministerial Performance Review retreat, presided over by President Muhammadu Buhari, where the Vice President delivered the progress report on the ESP implementation.
The retreat was organised to assess progress made towards the achievement of the nine key priorities of the Buhari administration, of which the ESP, was to mitigate the shock of COVID-19, and also to tackle longstanding structural challenges while repositioning the economy for the future.
“Progress has been much slower than envisaged. There are continuing delays in the disbursement of funds from the CBN. The Debenture agreement for the sum of N200B with the CBN which represents the bulk of the financing was agreed in April and has been signed by all”, lamented Osinbajo is the chairman of the ESP.
The Solar Power Naija, the ESP Solar Electrification Programme, was designed to create jobs and develop a local solar industry and provide access to electricity to 5 million households in off-grid, under-served communities through new solar connections. This would bring energy access to 25 million Nigerians.
This includes the assembly or manufacturing of components of off-grid solutions to facilitate the growth of the local manufacturing industry, while the use of local content will be encouraged to create 250,000 new jobs in the energy sector.
“But the 5m Solar Connections target is being delayed because while N140 billion was allocated through the CBN to facilitate it, only N7 billion of that has been disbursed” according to the Vice-president.
Explaining some key challenges of the implementation of the programme, the VP listed unwillingness of CBN to disburse funds, and the risk aversion of Public and private financial institutions, particularly for Power projects.
Funding delays were also noted on the Agric plan of the ESP.
Osinbajo disclosed that only N14 billion of the N471 billion as loans to farmers across 14 crop value chains have been disbursed to commercial banks.
“Even then, that amount is yet to be utilised by farmers due to late release for the 2021 wet farming season”.
Osinbajo gave reasons for the ESP, explaining that following the global pandemic, “there were sharp declines in some key sectors: Transportation sector declined by 49 per cent, Hospitality sector fell 40 per cent, the Education sector fell 24 per cent, Real Estate declined by 22 per cent, Trade by declined by 17 per cent and Construction declined 40 per cent.
Despite the funding challenges, however, Osinbajo said the ESP was credited as a major reason why Nigeria exited recession faster than predicted, as he showed the data on the positive growth of the sectors.
“Transportation has now grown to 77 per cent, Hospitality to 2 per cent, Education 1 per cent, Real Estate to 4 per cent Trade to 23 per cent, and Construction to 4 per cent.”
The ESP came on the heel of the inter-ministerial committee headed by the Minister of Finance that on the instruction of President Muhammadu Buhari, to quickly examine the implications of and the immediate mitigation steps that would be taken for the economic shocks being experienced as a result of Covid pandemic.
“We were clear – and this was Mr President’s position – that the only way of avoiding an economic disaster that could last for years was for the government to essentially put forward a major fiscal stimulus plan; with clear objectives of saving jobs, creating new ones, supporting businesses that may close down, and employees that may not be paid during lockdowns, and, of course, healthcare support to reduce the COVID-19 caseload.”
The VP continued, “the first objective of the ESP was to improve Healthcare and lowering the COVID-19 caseload, the second was restoring growth; the third – job creation and safeguarding existing jobs; the fourth – Increased Local Production, and part of that was what we called the Guaranteed Offtake Scheme; the fifth was Reducing Social Vulnerabilities, and that essentially was looking at how to improve the quality and effectiveness of the Social Investment Programmes and the scope of the programme.”
Since the implementation of different components of the Plan, including the MSMEs Survival Fund, Social Housing Scheme, and Solar Home System, among others, the ESP has recorded significant progress in achieving its objectives.
For instance, the ESP MSMEs Survival Fund, which was designed to create jobs and safeguard existing ones, has supported 1.1 million Nigerians and businesses nationwide.
The Survival Fund has different schemes, namely: the Guaranteed off-take Scheme, Payroll Support Scheme, Artisans & Transport Support Scheme, General MSME Grant Scheme and Formalization Support Scheme.
Explaining, the VP noted that under the Payroll support, “direct grants were given for a three-month period to 459,000 beneficiaries across the country, who received a total of N90,000 and N150,000 (N30,000 and N50,000 respectively per month) in salaries for the three-month period.
“Then, 293,000 transport workers and artisans received one-off grants of N30,000 each. While 82,000 businesses also received one-off grants under the MSME General grant scheme; and about 255,000 enterprises benefited from the CAC free registration of companies under the Formalization Support Scheme.”
Similarly, under the ESP Agriculture for Food and Jobs Plan, the Vice President noted that 6.39 million farmers have been enumerated so far and these farmers were geotagged to their land.
He said, “so far, 3.63 million passed the first stage of validation and another 2.47 million passed the second stage of validation. We’re validating them also for BVNs”.
“Also, 320 hectares of land has been cleared across 8 states at 40 hectares per state. The States are Kwara, Plateau, Cross River, Edo, Kaduna, Ekiti, Osun, and Ogun. These are States that require land clearing. Of course, many states do not require land clearing, and we simply supported those states directly. ₦ 471bn is allocated as loans to farmers across 14 Crop Value Chains, Beef Production, Aquaculture and Poultry Farming.”
The Vice President further said that “a subsidy of N5.1billion was paid to over one million farmers under the Fertilizer Subsidy Programme, which is a critical part of the Food for Jobs programme.
“Mr President approved a programme of giving subsidies to farmers for bags of fertilisers to each farmer depending on the size of the farm. But the strategy here was to give the farmer the amount of the subsidy directly in cash paid to their BVN verified account. Mr President approved the immediate disbursement of the Fertilizer Subsidy Fund to smallholder, vulnerable farmers in the country,” he added.
He also mentioned the ESP Public Works and Aviation component, saying “construction work is ongoing on 193 road sections totalling 3,707km of roads; with 26,021 Nigerians employed in rehabilitation/construction of these roads so far. The construction of 345km of rural roads, 205 boreholes and 10 treatment plants to create jobs and develop rural areas in 36 States and the FCT has commenced.”
In the same vein, Osinbajo said the ESP Social Housing Programme has helped to create thousands of jobs and boost the local building materials industry in the country.
Noting that so far about 1,151.689 hectares of land has been made ready for development, the VP said, “the target is to build 300,000 houses. This has the capacity to accommodate a further 34,550 homes. The Programme is being funded by a mix of resources, including Financing from the Federal Ministry of Finance, and a loan from the Central Bank under the ESP.
“Buyers have a window of at least 15 years to pay for their homes. The design is to build two-bedroom homes costing not more than N2 million – N3.75m for a three-room unit, and N4.25 for a four-room unit.
“At the moment, 4,700 homes have been approved in 7 States for financing for commencement in October. 5,400 are scheduled for November 2021.”
Comments are closed.