Vice President Yemi Osinbajo has lamented delays in the disbursement of funds by the Central Bank of Nigeria for critical projects in the Economic Sustainability plan.
This is as he called on the CBN to devalue the naira, as exchange rates are “artificially low”.
Osinbajo stated this on Monday, day one of the two-day Mid-Term Ministerial Performance Review retreat, presided over by the President, Major General Muhammadu Buhari (retd.), organised to assess progress made towards the achievement of the nine key priorities of the regime.
Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, revealed this on Sunday in a statement titled ‘How Buhari’s ESP post-covid-19 stimulus rescued economy, safeguarded jobs, by Osinbajo’.
According to the Vice President, “progress has been much slower than envisaged. There are continuing delays in the disbursement of funds from the CBN.
“The Debenture agreement for the sum of N200bn with the CBN which represents the bulk of the financing was agreed in April and has been signed by all.”
Explaining some key challenges of the implementation of the ESP Solar Electrification Programme, which is also designed to create jobs and develop a local solar industry and provide access to electricity to 5 million households in off-grid, under-served communities through new solar connections.
The Vice President listed the unwillingness of CBN to disburse funds, and the risk aversion of Public and private financial institutions, particularly for Power projects.
Funding delays were also noted on the Agric plan of the ESP.
Osinbajo disclosed that only ₦14bn of the N471bn as loans to farmers across 14 crop value chains have been disbursed to commercial banks. Even then, that amount is yet to be utilised by farmers due to the late release for the 2021 wet farming season.
He also called on the Central Bank of Nigeria (CBN) to review its strategy on foreign exchange and ensure that the Naira value reflects the market reality, rather than what he described as “artificially low,” deterring investors from bringing foreign exchange into the country.
“As for the exchange rate, I think we need to move our rates to be as reflective of the market as possible. This, in my own respectful view, is the only way to improve supply,” Osinbajo said.
“We can’t get new dollars into the system, where the exchange rate is artificially low. And everyone knows by how much our reserves can grow. I’m convinced that the demand management strategy currently being adopted by the CBN needs a rethink, and that is my view.
Currently, the naira is changing at ₦411 to $1 at the official side of the market, while the same goes for about ₦565 at the parallel market.
“There must be synergy between the fiscal and the monetary authority. We must be able to deal with the synergy, we must handle the synergy between the monetary authority, the CBN, and the fiscal side.”