Vice President Yemi Osinbajo revealed that the Central Bank of Nigeria’s (CBN) reluctance to transfer funds is dragging down the Economic Sustainability Plan (ESP) implementation (including the 5 million Solar Connection Scheme and agricultural plans for the ESP.
The Vice President made the announcement on Monday during President Muhammadu Buhari’s two-day Mid-Term Ministerial Performance Review retreat, where he provided a progress report on ESP implementation.
Additionally, he reported that just N14 billion of the N471 billion in loans had been disbursed to farmers in 14 different crop value chains under the ESP.
“The 5 million Solar Connections target is being delayed because while N140 billion was allocated through the CBN to facilitate it, only N7 billion of that has been disbursed,” Osinbajo said.
He added that some key challenges of the implementation of the program include the
“Unwillingness of CBN to disburse funds, and the risk aversion of Public and private financial institutions, particularly for Power projects.”
He also revealed that the ESP’s Agric plan had funding delays, with only N14 billion of the N471 billion in loans to farmers across 14 crop value chains having been disbursed to commercial banks.
“Even then, that amount is yet to be utilized by farmers due to late release for the 2021 wet farming season,” he said.
In addition, he encouraged the Central Bank of Nigeria (CBN) to reexamine its foreign exchange strategy and guarantee that the Naira value represents market reality rather than what he called “artificially low,” discouraging 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 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,” the Vice President stated, also adding that there must be synergy between the fiscal and the monetary authority.