The Central Bank of Nigeria (CBN) has announced its ‘100 for 100′ policy

The Central Bank of Nigeria (CBN) has released selection criteria for private sector companies interested in participating in the “100 for 100 PPP – Policy on Production and Productivity,” which was announced last week.

The central bank explained in a two-page notice obtained by THISDAY yesterday by its Development Finance Department that the selection criteria for participation would be based on the business’ immediate contribution to economic growth, job creation, and social impact.

It stated that evidence-based, transparent, and measurable criteria should be used in the selection of companies.

The move was made to ensure the operational framework for a robust and transparent process for identifying and selecting high-impact companies and projects under the central bank’s 100 for 100 PPP, according to the central bank.

“These are projects that, in the short term, must catalyze long-term employment-led economic growth through increased domestic production and productivity.”

“The projects for consideration must be new projects in existing companies that require new machinery and other support, and they must have the greatest potential to achieve significant scale in their in-country production, for domestic consumption and exports,” it stated.

The CBN reiterated that the instrument’s broad goal was to reverse the country’s over-reliance on imports by creating a platform that targets and supports the right companies and projects with the potential to transform and jumpstart the economy’s productive base.

The CBN explained that the instrument will provide naira intervention funding under existing CBN intervention processes as well as complete foreign exchange funding for new machinery.

“This instrument will only be used for new projects; it will not be used to refinance existing facilities, and it will be subject to an independent audit by international audit firms.

“All interventions made as part of this project will be made public and reported in national newspapers.” To complement and propel this initiative, the CBN will work with fiscal authorities to facilitate power sector, port, and export reforms, as well as ease of doing business in Nigeria.

“Candidate companies with satisfactory performance are invited to apply through their banks to the CBN Department of Development Finance, Office of the CBN Governor, effective today, November 01, 2021,” it added.

Production efficiency and scalability, local content capacity, job creation and human capital development, and contribution to economic growth are among the key areas of focus that the financial instrument would fund.

It stated that capacity utilisation and scalability should be considered when it comes to production efficiency and scalability. The indicators to look into are historical financial performance (three years audited report of the company); viability of the business; and creditworthiness of the company’s directors, according to the document.

It stated that all of the indicators would be given appropriate scores.

In terms of local content capacity, the banking sector regulator listed the scale of locally sourced raw materials as a parameter, with indicators such as more than 50% of raw material input sourced locally and more than 80% of jobs created being for Nigerians.

Furthermore, it listed the parameters for job creation and human capital development, including job creation and capacity building, as well as indicators for job creation, training, and skills development.

It also listed the parameters to consider in the area of contribution to economic growth, including the impact on key macroeconomic indicators and global export earning potential. Contribution to GDP potential, share of domestic market, foreign exchange earning potential, and ease of exporting are all indicators in this area.

In their application, firms that intend to benefit from the instrument will be graded as highly satisfactory, satisfactory, less satisfactory, and unsatisfactory.
Projects that meet the stipulated requirements by 81 percent to 100 percent are considered ‘Highly Satisfactory,’ while those that meet them by 61 percent to 80 percent are considered ‘Satisfactory.’

On the other hand, it stated that projects that meet specified requirements by 51% to 60% will be rated as ‘Less Satisfactory,’ while those that meet the requirement by 0% to 50% will be rated as ‘Unsatisfactory.’

Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria, announced the new initiative last week, saying it was designed to boost activity in selected private sector companies across the country.

CBN will advertise, screen, scrutinize, and financially support 100 targeted private sector companies in 100 days, beginning November 1, according to Emefiele.

A new set of 100 companies would be rolled out every 100 days, according to the CBN governor, and their names would be published in national dailies for Nigerians to see and confirm.

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He stated that the CBN Development Finance Department would be in charge of the new initiative, which would be under his direct supervision.
The CBN governor stated that the initiative would be the best and most long-term way to strengthen the naira’s value, emphasizing that what the country needs is more production.

“Through banks, the financial instrument will be available to their customers in critical areas to boost production and productivity, as well as to immediately transform and jumpstart the productive base of the economy,” Emefiele explained.

“After these 100 company projects in the first 100 days starting November 1, we’ll take the next 100 companies/projects for another 100 days starting February 1, 2022, and then another 100 companies for another 100 days starting May 1, 2022.”

He said the instrument was part of a plan to reduce the country’s reliance on imports, and that the country couldn’t afford to waste its reserves on low-cost imports and currency traders.