Industrialization presents the most effective avenue for growing a nation’s economy, engaging the unemployed, and building a viral export base.
The Asian Tigers, namely Hong Kong, Singapore, South Korea and Taiwan, and other southeast Asian nations have successfully attained high economic growth through rapid industrialization.
Nigeria’s manufacturing sector currently contributes four percent to the Gross Domestic Product but with a potential for much more
In a bid to change the narrative and put the industrial sector in the driver’s seat of economic growth, the Central Bank of Nigeria has developed targeted and tailor-made initiatives to jump-start the underperforming industrial sector.
One of the novel interventions is known as the One hundred for One hundred Policy on Production and Productivity or Hundred for Hundred, for short.
The Policy was introduced to reverse the nation’s over-reliance on imports by creating an ecosystem that targets and supports the right companies and projects with the potential to transform the productive base of the economy.
In specific terms, the Hundred for Hundred Policy seeks to increase local production and productivity, increase nonoil exports, reduce imports of certain commodities and improve foreign exchange earnings for the country.
Under this policy, one hundred private sector companies with projects that can increase domestic production, increase non oil exports and reduce imports are selected every one hundred days for funding.
The maximum loan amount for the benefitting companies is five billion naira for the acquisition of plant and machinery as well as for working capital.
At a single interest rate of five percent, the loan tenor is ten years with a two-year moratorium while working capita shall have a tenor year with provision for roll over for a maximum of three years.
According to the CBN Governor, Mr. Godwin Emefiele, the sectors covered under this loan facility includes Manufacturing, Agriculture and Agro-processing, Extractive Industries, Petrochemicals, renewable energy, Healthcare, and Pharmaceuticals as well as Logistical services and trade-related infrastructure.
These sectors are clearly high employment generating and capable of reducing the nation’s import bill which has become an albatross for economic growth.
Mr. Emefiele explained that the policy was in line with President Muhammadu Buhari’s commitment to reducing overreliance on imports for foods and industrial raw materials and promoting self-reliance in these critical areas.
The mission of the apex bank under the leadership of Mr. Godwin Emefiele through the hundred for hundred policy is to ensure that priority is accorded to companies that display progress in the CBN’s import substitution and job creation drive.
The policy has since generated interest in the private sector, with the first cycle of disbursement made to qualifying firms after screening. An initial two hundred and forty-three applications valued at three hundred and twenty-one billion naira was received out of which twenty-eighth companies were selected for funding to the tune of twenty-three billion naira.
The participation in the first cycle is an indication that the policy was well thought out and capable of turning around the fortunes of the benefiting companies through improved productivity, employment generation, and import reduction.
The One Hundred for One Hundred Policy is one among many in the suites of interventions that the Central Bank of Nigeria has come up with, rather creatively
in a bid to tackle the multi-dimensional of boosting demand, creating jobs, and spurring economic growth.
It is important to note that the Bank under Mr. Godwin Emefiele has not created these interventions in silos but developed them in such a way that they complement each other towards achieving the twin goal of economic growth and stability as well as import reduction.
The Hundred for Hundred Policy on Production and Productivity in particular, which is the latest of the interventions targeted at the real sector, couldn’t have come at a better time, judging by its feature to finance growth in priority areas and emphasis on job creation.
It is therefore fitting that the policy along with similar ones get the commendation and support it deserves to enable it to deliver on its promises of self-sufficiency, export stimulation, and perhaps most importantly job creation.
Reporting by Biodun Dare, editing by Daniel Adejo.