The Central Bank of Nigeria (CBN) has set a maximum gateway of N5 billion to be accessed by an obligor under its new financial instrument, tagged, 100 for 100 Policy on Production and Productivity (100 for 100 PPP) which was introduced recently.
The bank added that any amount above the limit shall require the special approval of CBN’s management.
According to the guidelines for the implementation of the policy which was signed by the CBN Director, Development Finance Department, Mr. Yila Yusuf and posted on the bank’s website, interest rate under the intervention shall be at not more than five per cent per annum (p.a) all inclusive, up to February 28, 2022, after which interest on the facility shall revert to nine per cent effective from March 1, 2022.
CBN Governor, Mr. Godwin Emefiele, last month unveiled the new financial instrument to boost support for selected private sector companies in the country.
According to him, the policy seeks to advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, beginning from November 1, 2021, and rolling over every 100 days with new set of 100 companies.
Essentially, the framework seeks to stimulate the flow of credit to the real sector of the economy in order to reverse the nation’s over-reliance on import.
The central bank explained that the initiative shall be operated in the first instance for a period not exceeding December 31, 2031, depending on the complexity of the project.
The apex bank said the initiative shall be funded from the CBN’s Real Sector Support Facility – Differentiated Cash Reserve Requirement (RSSF-DCRR) window or any other funding window as may be determined by the CBN.
It added that the initiative shall be implemented in line with the provisions of the guidelines for the implementation of the underlying intervention (RSSF¬DCRR) including the sanction regime.
The bank pointed out that the 100 for 100 PPP was also designed to stimulate investments in Nigeria’s manufacturing sector with the core objective of boosting production and productivity, necessary to transform and catalyse the productive base of the economy.
The overarching goal of the initiative is to reverse the nation’s over reliance on import, the central bank added.
It stated that initiative represented was a financial instrument designed to create the flow of finance and investments to enterprises with potential to catalyse sustainable economic growth trajectory, accelerate structural transformation, promote diversification, and improve productivity.
The guideline added: “Quarterly, starting from 1st November 2021, the initiative shall select 100 private sector companies with projects that have potential to significantly increase domestic production and productivity, reduce imports, increase non-oil exports, and overall improvements in the foreign exchange generating capacity of the Nigerian economy.
“The initiative, which shall be bank-led, will be rolled over every 100 days (that is, quarterly) with new set of companies selected for financing under the initiative.
“The initiative shall be implemented in collaboration with relevant stakeholders with focus on micro and macroeconomic impacts, in terms of contribution to GDP and exports, sustainable jobs created, local content development, production output, and capacity utilisation and integration into the global value chain.”
The guidelines outlined the operational modalities for the instrument.
The broad objective of the initiative is to reverse the nation’s over-reliance on imports, by creating an ecosystem that targets and supports the right projects with potential to transform and catalyse the productive base of the economy.
Watch Leakblast TV channel from around the world
Thanks for reading via the most updated news portal
SUPPORT LEAKBLAST JOURNALISM OF INTEGRITY AND CREDIBILITY
Good journalism costs a lot of money.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble Endeavor.
By contributing to LeakBlast, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.