Yesterday, the Governor of the Central Bank of Nigeria (CBN) disclosed the disbursement of N23.2bn to 28 successful companies at the maiden edition of 100 for 100 Policy for Production and Productivity (PPP). According to the CBN, it reviewed 243 applications worth N321.1bn across sectors such as agriculture, energy, healthcare, manufacturing, mining, and services. In selecting the successful companies, the applications were carefully screened and scrutinised against set-out selection criteria and were categorised into production efficiency & scalability; local content capacity; job creation & human capital development; operating sector relevance; and potential contribution to economic growth. Ultimately, funds, which were stressed as loans, were disbursed to only 28 applicants valued at N23.2bn, which comprised 14 in the manufacturing sector, 12 in the agricultural sector, and two in healthcare.  

The CBN’s 100 for 100 policy is an intervention policy with the aim to stimulate investments in Nigeria’s manufacturing sector with the core objective of boosting production & productivity, necessary to transform and catalyze the productive base of the economy. The emphasis of the policy is to provide funding for businesses with the potential to support import substitution, drive non-oil export earnings and consequently improve the foreign exchange earning capacity of the economy. According to the CBN’s policy guideline for the initiative, fund disbursement will come in form of either long-term loan or working capital with a maximum of N5.0bn.

Evaluating the possible impact of this policy, it looks like a welcome development, albeit contingent on proper implementation and several possibly uncontrollable factors. We note that the Emefiele-led CBN has been aggressive in its development finance initiatives at unprecedented levels. However, the level of success compared to investments sunk into different projects do not appear commensurate. We believe there are legacy economic challenges (regulation, infrastructure, institutions, and insecurity) that continue to make it hostile for businesses to thrive particularly in a perennially poor market like Nigeria. Thus, we believe spurring economic growth requires much more than fiat-led interventions in this current climate.