The Central bank of Nigeria (CBN) has so far disbursed N198 billion out of the N200 billion power and aviation sectors intervention fund. Suleiman Barau, CBN Deputy Governor, Corporate Services who confirmed this said the amount has been released to the Bank of Industry for onward disbursement to participating companies.

Mr Barau, who represented the CBN governor at the second public lecture organised by Kresta Laurel Limited in Lagos said the poor infrastructure base in the country is of concern to the regulator, which is why it is intervening in some critical sectors of the economy. “Infrastructure is not part of CBN mandate but it impacts on our ability to deliver on our mandate. We cannot achieve single digit inflation or interest rate when banks have to provide their own power, and sometimes build roads. Our ability to deliver on our core mandate depends on our ability to also settle issues of infrastructure.

Ability to deliver: According to Mr Barau, the high interest rate, coupled with low deposit rate is affecting the viability of Nigerian companies. “These things, one way or the other, affects our ability to deliver the right monetary policy framework for the economy to develop.” The CBN last year approved the N500 billion intervention facility for critical sectors of the economy. Out of the amount, N300 billion was earmarked for the power and aviation sectors. The funds, which are to be channelled through the Bank of Industry (BOI), is to be accessed through commercial banks with a tenor of 10 to 15 years, at concessionary interest rate of not more than 7.0 percent, and is designed to address some of the infrastructural challenges of the real sector. The sum of N200 billion was also approved for the refinancing and restructuring of banks’ existing loan portfolios to Nigerian small and medium enterprises and the manufacturing sector.

In his speech read on his behalf, titled, ‘Infrastructure, Industrialization and the Nigerian Economy,’ the Governor of the CBN, Lamido Sanusi said the dearth of infrastructure in the country has made it necessary for government to engage the private sector in a public private sector partnership (PPP). He said stability in the financial sector will also engender infrastructural financing from the banks. “The future of infrastructure development in Nigeria depends partly on the state of the financial markets. Fiscal space for domestic public sector sources of infrastructure financing is limited,” he said, adding that there is need to explore the potential for accessing local and regional sources of private financing in building Nigeria’s infrastructure.

No framework: He explained that in the absence of framework for mitigating risks, there are commercial and political risks that may affect the execution of infrastructure project in Nigeria. “The CBN will continue to provide adequate support to promote growth in the real sector of the Nigerian economy. The ultimate goal of the CBN support is to establish a credible monetary regime that will facilitate the attainment of key mandates of ensuring price and monetary stability, promotion of financial sector soundness and stability, production of goods and services which promote sustainable economic growth and employment creation in the medium to long term.” He said these factors are key in developing the critical infrastructure that will take the country from where it is to where it should be.