The Central Bank of Nigeria has said that over N3 trillion out of the N4.2 trillion intervention funds are outstanding as of December 31st, 2020.
This is according to data from the recently released fourth-quarter economic report (4Q’2020) of Nigeria’s apex bank.
According to the apex bank, given the recent direct results for Nigeria’s unemployment, inflation rate, and GDP growth rate, “we were curious to assess the CBN’s inventory of intervention programs which were supposedly created to address Nigeria’s economic challenges.
“Intervention schemes by the Bank continued to focus on enhanced credit delivery to critical sectors, in a bid to enhance productivity and stimulate the real sector of the economy.” the report said.
The CBN in its report outlined the various activities and accomplishments achieved so far.
Included in this 2020 economic report is a summary of the Central bank’s inventory of intervention programs with a breakdown of; The number of intervention programs inflight, The total number of projects approved within each initiative, Funds disbursed by the CBN for each initiative, Total repayments received as of November 2020.
Whilst the Central Bank must be praised for continuous transparency, the results of the program are worrisome. Specifically, there are 23 major intervention programs in-flight for which N4.23 trillion has been disbursed by the CBN across 3 million projects.
Remarkably, the CBN has an intervention fund for almost every single economic sector. For instance, agriculture sector received. N1.47 trillion, Power sector received N1.06 trillion.
Others are SMEs (across Manufacturing, Trade, Transportation) received N1.15 trillion.
Alarmingly of the N4.23 trillion disbursed, only N1.16 trillion (or 27.5percent) has been repaid. Thus N3.07 trillion (or 72.5percent remains outstanding).
One key observation is that the CBN interventions are concentrated on a tiny population of projects. Specifically, of the N4.2 trillion in CBN interventions which the bank reports to benefit over 3 million projects. N3.1 trillion (73percent of the total funds) were disbursed to only 1,116 projects (0.04percent of projects)
This trend also shows up in the average size of the amount disbursed for each project. Whereby the Agricultural sector intervention of N1.467 trillion was disbursed to 2.5 million projects.
The interpretation of this data indicates that the CBN’s approach to intervention appears to be too fragmented to yield any expected reduction in unemployment nor lead to sustained GDP growth rates. This is despite all key sectors being targeted by the bank.