Nigerian central bank to set up national micro-lender

Nigeria’s central bank will establish a national micro-finance institution, while a leading presidential candidate has said he will not give the current governor a second term.

Central Bank of Nigeria governor Godwin Emefiele announced plans to set up a lender with a mandate to make micro-loans to small businesses and individuals. The micro-lender would help boost Nigera’s very low financial inclusion rates, Emefiele told a conference in Abuja on January 17, local publication Today reported.

Emefiele said official figures showed 36.8% of eligible Nigerian adults lacked access to financial services in 2018, down from the 2016 figure of 41.6%. But Emefiele noted that the Nigerian government set itself a target in 2016 of having only 20% of Nigerians lacking financial access by 2020.

Emefiele said the central bank would work to set up the micro-lender with the Nigerian Postal Service (Nipost), as well as the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (Nirsal) and the country’s Bankers’ Committee. The new bank would use the postal service’s offices up and down the country, Emefiele said.

He said the lender would “serve as an efficient channel for the disbursement and monitoring of key intervention funds” from the central bank. These include the Anchor Borrowers Fund, and the Small and Medium Enterprises fund.

Emefiele has made it a major strategic goal for the central bank to improve Nigeria’s domestic food supply and diversify its industrial production. He has frequently said the country is over-dependent on oil and gas exports.

Under Emefiele’s leadership, the central bank has become heavily involved in loaning funds to small and medium enterprises. It has also financed larger companies involved in industries deemed to be particularly important in encouraging diversification and import substitution.

Candidate says Emefiele must go

A leading candidate in Nigeria’s presidential elections has pledged not to give Emefiele a second term once his current mandate runs out in June. “I don’t think he’s pursued the right policies,” Atiku Abubakar said of Emefiele in an interview with Bloomberg on January 16. “It’s important to have the right people” in the central bank, Abubakar added.

He also said he planned to float Nigeria’s currency, the naira, if elected. Abubakar said he would sell off most of the most important firms in the country, the state-owned Nigerian National Petroleum Corporation.

Abubakar is seen as perhaps the strongest opposition candidate in Nigeria’s presidential election, due to be held on February 16. He is opposing current president Muhammadu Buhari, who won the election in March 2015. Abubakar is a businessman, described by local media as a billionaire. Buhari is a former army general who ruled Nigeria as a military dictator.

Some past Nigerian presidential elections have been marked by a high level of violence and alleged fraud. Presidents have sometimes refused to step down despite failing to win a majority of votes.

Emefiele was made governor in June 2014 by Nigeria’s then-president Goodluck Jonathan. Jonathan had effectively forced Emefiele’s predecessor as governor, Sanusi Lamido, out of office. 

Jonathan accused Lamido of leaking a memo detailing the state oil company’s failure to account for $50 billion. Lamido was appointed in June 2009 by then-president Umaru Yar’Adua, who died in office in May 2010.