Last Updated on
LAGOS – In the face of dwindling oil revenues and the global economic meltdown occasioned by the COVID-19 pandemic, the point on revamping agriculture cannot be overemphasised. It is based on this that the Central Bank of Nigeria (CBN) came with stimulus packages such as the extension of loan moratorium, interest rate reduction from nine per cent to five per cent on intervention programmes and creation of the N50billion credit facility to support businesses.
Some of the stakeholders in separate interviews with DAILY INDEPENDENT commended the CBN for the gesture, stating that it is a right step in the right direction to assist businesses at this time and also cushion the effect of the lockdown on businesses.
They were also quick to say that more needs to be done to support businesses especially the agro allied, micro, small and medium scale enterprises and also if the country is really serious about revamping agriculture.
The stakeholders also noted that the loans provided at this time may be difficult to pay back as the pandemic has affected every sector and micro, small, medium enterprises are the worst hit, that the CBN instead of coming up with credit facility of reduced interest rate, should have come up with grants or credit facility of zero interest rate loans which should run for at least three years.
Prince Wale Oyekoya, an Agriculturalist and Chief Executive Officer of Bama Farms, said that the COVID-19 pandemic is a worldwide disease that requires international and national attention and if not properly managed, it could lead to famine to some poor countries like Nigeria.
He said the CBN covid-19 intervention funds to MSME is a good initiative but it could be better if it could come in form of grants instead of soft loans as it is been done all the over the world to cushion the effects of COVID-19 pandemic.
Oyekoya noted that it will be difficult to pay back any loans now due to the situation at hand as many businesses have been collapsed beyond economic repair and that is why other countries are writing off business loans and rolling out stimulus packages to jumpstart the economy.
He stated that this is not the time to play politics with the nation’s fragile economy as many countries are going through recession.
According to him, “Moratorium is good to allow businesses time to pay back but what is the point of moratorium when the infrastructures have not been improved but worse and goods produced cannot be sold because of lockdown and MSME are the worst hit with the lockdown.
“More funds in terms of grants need to be ejected into the economy if we are to survive the COVID-19 after effect. If banks and other conglomerates are closing up or reducing staffs, you can then imagine what the effect will be on small businesses,” he added.
Victor Iyama, National President, Federation of Agricultural Commodity Association of Nigeria (FACAN) in his view stated that it is better than not doing anything at all, as he said it is a known fact that to revamp agriculture it is not a matter of N50billion that a lot of money have to be put into it.
“For me, I will say that it is better than not doing anything at all, that is the way I see it, we know that it is just a tip in the iceberg, at least it will do something. We all know that for us to revamp our agriculture, it is not matter of N50billion, a lot of many have to be put into it, but it is better than nothing.
“We all know that agriculture is the mainstay for us to survive in this country now, and if something is the mainstay of your livelihood now; then you should know how much you should put into it to make it sustainable, we all know that and they have to start talking about putting a lot of money and make it zero interest at least for the next three years.
“That is the way to go, it is not a matter of five percent and it must be attached to serious farmers not portfolio farmers, we have to be serious about agriculture,” he said.
Also Henry Olatujoye, Chairman Board of Trustees (BOT), National Palm Produce Association of Nigeria (NPPAN) said “the effort of the CBN is good only for academic achievement why because when you extend the moratorium of an active loan in an environment of COVID-19 where you experience total lockdown of business activities it is like setting foundation for the eventual collapse of the business.
“The business is not making money during the period, yet you are extending moratorium and reducing interest. The question is how you expect the system to pay the reduced interest. It’s like evading the realities of COVID- 19,” he said.
Olatujoye stated that what he expects the CBN to have done is to stop activities of interest and principal on active and performing loan for the period under lockdown.
“On the 50 billion target credit facilities, to me, it is nothing but financial political statements. Of the previous intervention of this nature, can the CBN come out with measurement of success recorded. He added that in other countries of the world, the data that of those that will benefit from such facilities and securities required for the loan would have been made known instead of qualifying them with undefined adjective.
“Can CBN publish all the names of agro allied micro, small, and medium sized industries, there location, capacities to assess loan, performance across the sector they operate? How did the CBN coMJme to conclusion that the need of SME during this lockdown period is N50billion, what if they need N200billion? He queried.
“In all, we are still playing games and dancing makosa with our future with the way we handle our economy without a veritable and workable data to make measure decisions.
“It is time we take decisions that are measurable with possibilities of success rather than what we are doing now, rolling out policy statements that cannot be substantiated or measured,” he added.
Emmanuel Ijewere, Vice President of the Nigeria Agribusiness Group (NABG) said that the CBN’s step was an intelligent and smart one but that the reality has changed, that at the time the CBN was planning this, the price of oil was far more than twice what it is now.
He said that the lockdown has a negative impact on the economy and that the Gross Domestic Product (GPD) as it is now has never been anticipated in the apex’s bank calculation.
He said that the CBN with its good intention was attacked by three events which according to him include; the price of crude oil which has affected Nigeria very terribly, Nigeria been heavily indebted with a substantial part of its own budget used to service debt and the economy been on standstill because people are lockdown.
“All those three attacks coming at the same time have changed the entire picture that the Central Bank or anybody in Nigeria had.
Ijewere said that Nigeria needs to go back to the drawing board and that in going back to the drawing board this time it must not be political discussion but an economic discussion.
It would be recalled that the CBN through the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank has already commenced the disbursement of the N50billion targeted credit facility to businesses selected as beneficiaries.
Abubakar Kure, Managing Director of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), while speaking at during the first phase of the disbursement of the facility in Abuja said that the idea was to provide cash flow or liquidity in order to mitigate effects of COVID-19 pandemic and help the economy to normalise.
He said that businesses and individuals were seriously affected by this deadly virus in the country.
Kure noted that the process was transparent and accessible to all and sundry and ensured only applicants who were qualified were selected.