‘All macro-economic indicators are positive’

Central Bank of Nigeria’s (CBN) governor Godwin Emefiele

Nigeria’s Central Bank Governor, Godwin Emefiele says the institution is ready to support businesses that would like to work with the CBN towards achieving import substitution adding that the move is aimed at increasing Nigeria’s self-sufficiency. CNBC Africa’s Christycole Popoola caught up with him on Thursday and they discussed the country’s diversification agenda as well as the uncertainty that has surrounded the Monetary Policy Committee.

Can I ask you about the MPC?
Yes. Of course you can.

It’s been almost a quarter of year now and we haven’t had an MPC.
There will be MPC this time. The MPC is supposed to be holding on the 19th and the 20th of March. The Senate is in the process of screening nominees. We’re going to have a week to 10 days extension of the date of MPC, but the MPC will certainly hold by latest the first week in April.

There have been doubts about not having a direction in terms of Nigeria’s Monetary Policy. What are your thoughts on this?
It’s not to say that theMPC is not important but the good thing is that the main decision that the MPC would have taken which would have been based on price stability or altering the price dynamic today, had no serious need. We had not seen the need right now to alter price mechanisms. So for that reason, reserves building up, stability in the country’s exchange rate, economic growth, the downward trend in inflation – all macro economic indicators pointing in a positive direction. There was nothing for anyone to worry about.

What are your thoughts on the commissioning of the Sunti Golden Sugar Estate?
I must say that it’s a great day for not just Flourmills but also for Nigeria. Given the fact that sugar is an item that is being imported into Nigeria heavily today, and to find a company like Flourmills who is also one of the importers setting up a big plant like this right at the centre of Sunti, is something that is gratifying to all of us.

What are your expectations of the project going forward?
Well, I’m told from reports that I’ve read that this plant should produce close to 10,000 metric tonnes of sugar per year even though it has the capacity to produce close to 50,000 metric tonnes. We would like to see the company ramp up its production of sugar from 10,000 to 20,000, to 40,000 and eventually hit 50,000 metric tonnes. But, we know that a lot is required and the Central Bank stands ready to give all the support that is needed to achieve those objectives.
In the past couple of decades, the production of sugar in Nigeria was a dream until the commissioning that we’re seeing today. I’d like you to talk us through the activities of the CBN in Nigeria to ensure that the dreams of sustainability in sugar production in Nigeria become a reality.

Like you already know the Central Bank is currently focused not just its primary mandate of price and monetary stability, exchange rate stability. We’re also looking aggressively into development finance. Our own primary interest is supporting enterprises and businesses that would like to work with us towards achieving import substitution. That is goods or products that we can produce in the country and are currently being imported into the country. What do we do to support some of those companies to ensure that some imported items can be produced locally. Our interest is in providing that support, and we are happy that the CBN has played an active role in supporting the establishment of some of these projects. It may interest you to know that the Central Bank of Nigeria has invested over N27 billion into this plant so far and we are willing to do more. I know that in plants of this nature the standard practice is for the factory to produce crude sugar for 6 months in the year. This plant currently produces its raw sugar for one month instead of up to 6 months which is the standard practice. I also know that a lot of investment is still needed but the basic problem that we see here having set up this plant is that it’s a 50,000 metric tonne facility producing 10,000 tonnes. The reason for this is the inadequate supply of sugar cane. The company this year will be producing about 6000 hectares of sugar cane but we say that to be able to meet their target they should be producing close to 10,000 hectares. We are also saying that we will be supporting the company to work with the local community and support them through the CBN’s Anchor borrower program so that when we educate these communities in the production of sugar cane, they will be able to uptake it from them, and through that medium you’ll find that we are creating jobs and wealth in the rural community for them to produce sugar cane which will be off taken by Sunti sugar and with that we’ll be able to see that we are improving our economic activity, improving the wealth of our people, creating jobs for our people and at the same time working towards achieving economic growth in Nigeria.

All of these are of course tied to the diversification drive of the country and the ease of doing business. Would you say that diversification is working?
Diversification is working and working and working. It is working and I think I must commend the Federal Government for it’s tenacity. When the president came on board, he came at a time when the global crisis was setting in and I had conversations with him when I said, “Our reserves are going to plummet.” And we came up with an idea that we produce the items we were importing that can be produced in Nigeria. Sugar and some others came into mind and that’s why the president insisted and we are working with him to ensure that we diversify our economy from being a predominantly import dependent economy to an economy that feeds on what it produces. We’re making efforts to ensure that we attain food security and the diversification of the economy away from being import dependent.

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