A team from the Central Bank of Nigeria visited Lagos last week, for on-site monitoring and evaluation of some projects financed by the various interventions it had provided. Nume Ekeghe was on tour and writing about the progress of certain projects.
Over the years, the Nigerian economy has been in need of capital as businesses struggle to secure the funds needed to grow their businesses, while the government could not fill the infrastructure gaps that would accelerate development. and growth. For a company like The Candel Company Limited, an agrochemical production company in the Lekki Free Trade Zone, the Central Bank of Nigeria (CBN) intervention fund had revived it after it nearly went bankrupt. Over the years, the CBN has released N8.8 trillion in intervention funds for critical sectors of the economy. According to CBN’s Development Finance Manager, Yila Yusuf, the department responsible for interventions in the various stimulus sectors of the economy, financing the various projects through its intervention funds was a multi-targeted strategy aimed at not only to stimulate economic growth and development while creating jobs, but also a means of increasing the country’s export earnings. One of the infrastructure projects funded by the CBN intervention is the Lagos Railway Project, which is expected to start trial runs by the end of this year and begin full operations by the end of the first quarter of 2023.
The railway project
Speaking during a tour of the red and blue lines railway project in Lagos, Yusuf noted that the apex bank had disbursed the bulk of the funds for the project, which he described as a “pretty impressive signature project “.
While specifying that the on-site monitoring and evaluation of the projects aim to ensure that the funds collected within the framework of the intervention funds are well used, he declared for the railway project, “it exceeds our expectations”.
With a total of 68 billion naira to be disbursed for the railway project, he said between 750,000 and one million people will use this infrastructure daily, adding that it will contribute to national production.
“We were here last year and construction is still going on, but there has been major progress. It’s great to see a lot of Nigerians working there too, caretakers doing welding or some form of construction. We are pleased with the progress.
“More importantly, for us as central bankers, we want to see how this will help output. It will be multimodal, so there will be water transport, there will also be the bus journey. Additionally, we look forward to other states emulating the kind of infrastructure that has been put in place. They can come and learn from Legos and get the funding to be able to ensure that the state can get world-class infrastructure,” he said. For her part, the chief executive of the Lagos Metropolitan Area Transport Agency, Abimbola Akinajo, who is in charge of the project, explained that the red and blue lines are expected to move between 750,000 and one million passengers daily, because they operate at a three-minute interval. To ensure that there is no interruption of movement within the system, she said: “We are building an IPP dedicated to it so that we have a dedicated power supply for the electrification of the rail . We are also talking to Eko Disco to make sure we have a dedicated line to ensure there is never a power outage between Eko Disco and the IPP.
“We have a rotating UPS system that will ensure there is never a shutdown if the main Eko Disco distribution fails, the UPS resumes until the IPP resumes.” Explaining the multimodal rail system, she said that within the station, “we have bus services which will also operate. Regular buses are also integrated into the rail part of the interchange. We will also have a jetty and it is on the marina which is now becoming a transport hub which has always been for Lagos and which we hope will regenerate the area from a business district perspective.
Investments in the energy sector
Speaking on the investments made in the energy sector, Yusuf noted, “We realized that Nigeria had over seven million metering gaps, and we are now even close to 10 million. Phase zero is just one million of which Ikeja Electric has already reached and exceeded the target that has been sent. So for the first phase, we’re looking at three million meters across the whole disco. He noted that energy takes about 24 percent of the portfolio that is out. For Ikeja Electric, he said, “They showed us some of the projects the funds have been disbursed for; both on the national mass metering program and then on OPEX and CAPEX. We are very impressed with what we have seen so far. Ikeja Disco has been very innovative.
“As we continue to adapt some of these interventions, we also see the plans that they are moving forward to be able to address the perennial energy issues that we have.”
Speaking, IKEDC Managing Director Folake Soetan said: “National mass metering and phase zero which is to ensure customers are measured and another intervention was for us to expand our network to ensure also relieve overloaded transformers to ensure customers have more power and OPEX as well.
“The funds we receive from the central bank are intended to help increase energy to help reduce losses and improve the energy we give to our customers and we now have over 40 billion naira, and we are still working with CBN, to make sure we get more.
Financing the real sector to boost currencies
While inspecting the companies that had accessed the various CBN intervention funds in the Lekki Free Trade Zone areas, the Director of CBN Banking Supervision Department, Mr. Mustapha Haruna, said companies that participated in the various interventions such as the Anchor Borrower Program, the Real Sector Support Facility Discretionary Cash Reserve Ratio (RSSF-DCRR), and others would be a plus for the country’s foreign exchange earnings campaign.
The CBN team had inspected the facilities of The Candel Company Limited, an agrochemical manufacturing company which had accessed N2 billion under the CBN commercial agricultural credit scheme, Pinnacle Oil and Gas, which has a tank farm, Sana Building Systems (SBS), a steel construction company with the ability to export as well as the Tolerams Group which has invested billions of dollars in the LFZ.
Haruna had noted, “There is clear validation of the strategic wisdom behind the various interventions of the Central Bank of Nigeria, particularly in supporting the real sector. Candle is at two critical junctures. One is manufacturing equipment, as you will recall recently the central bank introduced the RTX 200 policy designed to boost the non-oil sector and what Candel is doing here is very complementary to that policy.
“The support that the central bank has given in terms of promoting real sector growth is quite strategic. And considering the potential benefits, both in terms of job creation and impact on the entire value chain, they are quite massive. We need more efforts like this from the private sector.
“I oversee banks and banks need bankable projects like this to be able to thrive. So there is a sense in which all these dots all connect for the benefit, the ultimate benefits of promoting the growth and development of the Nigerian economy as a whole.
In addition, the Director of Trade and Trade Department, Ozoemena Nnaji, alluded to the fact that some companies that had secured intervention to expand their business are now allowing Nigeria to increase its non-oil export earnings.
“SBS actually exports some of its products here to our neighboring countries, and that will earn us foreign currency. We also hope that the RT200 can enjoy more so that I can benefit from the discount.
“Also, the multiplier effect of the business is huge, because we have people building this product in the neighboring countries of Cameroon and Ghana where they have done business, and we also have companies here using their materials and their product,” he said.
For his part, the Head of Legal Services Department of CBN, Mr. Kofo Salam-Alada, during a visit to Candel Company Limited., called on banks to support Nigerian companies to increase production in the country.
“With what the company is doing, I think bankers should actually start coming for them; it is not just the Central Bank intervention funds, Nigerian banks should actually seek them out to see how they can partner with them to get things done.
“The key thing that Nigerians also need to know is that we need to support our people, not just in terms of job creation; for the CBN wanting to increase foreign exchange in this country, it is something that needs to be supported,” he said.
SBS Chairman Mr. Ken Krieger praised CBN’s inventions in the real estate industry and his company.
He said: “This factory is a result of the funding we received and without that support, honestly, we couldn’t have done it. We are therefore very grateful to the CBN for being diligent in building the economy. We now export to Cameroon, currently; we also have projects cited for Ghana and Ivory Coast.