The Central Bank of Nigeria (CBN) has released the selection criteria for private sector companies who wish to take part in its newly introduced financial instrument known as ‘The 100 for 100 PPP – Policy on Production and Productivity,’ which was announced last week.
The initiative, which was announced by the CBN Governor, Godwin Emefiele, at the launch of the Central Bank Digital Currency (CBDC), eNaira, is to help boost local production and productivity in various sectors of the economy.
According to Thisday, the CBN, in a 2-page notice signed by its Development Finance Department, explained that the selection criteria for participation would be based on the businesses’ immediate contribution to economic growth, jobs creation, and social impact. The CBN noted that in selecting the companies, evidence-based, transparent and measurable criteria shall be deployed.
What the CBN is saying about the criteria
The apex bank pointed out that the selection criteria was established to ensure the operational framework for a robust and transparent process for identifying and selecting high-impact companies and projects under its 100 for 100 PPP. Some of the listed criteria include;
“These are projects that must catalyse sustainable employment-led economic growth through increased domestic production and productivity in the near term.
“The projects for consideration shall be new projects in existing companies requiring new machinery and other support and must have the greatest potential to achieve significant scale in their in-country production and for domestic consumption and exports.
“This instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to independent evaluation by international audit firms.
“All intervention under this project will be made public and published in national dailies. The CBN will work with fiscal authorities to facilitate power sector, port and export reforms as well as ease of doing business to improve competitiveness in Nigeria so as to complement and propel this initiative.
“Candidate companies with satisfactory performance are invited to apply through their banks effective, today November 01, 2021, to the CBN Department of Development Finance, Office of CBN Governor.’’
The CBN listed the key areas of focus to be funded by the financial instrument to include production efficiency and scalability; local content capacity; job creation and human capital development and contribution to economic growth.
It stated that while considering capacity utilisation and scalability, it will look into historical financial performance (3 years audited report of the company); viability of the business and creditworthiness of its directors and they will all be assigned relevant scores.
On local content capacity, the CBN indicated that over 50% of the raw material input should be sourced locally while over 80% of the jobs created should be sourced locally for Nigerians with capacity building which includes training and skills development.
On its contribution to economic growth, the criteria to be considered include impact on key macroeconomic indicators and global export earning potential as well as contribution to GDP potential, share of domestic market, foreign exchange earning potential and ease of exports.
Firms that intend to benefit from the instrument would be scored: Highly satisfactory, satisfactory, less satisfactory and unsatisfactory in their application.
Projects that meet the stipulated requirements by 81% to 100% shall be adjudged ‘Highly Satisfactory,’ while those that meet the stipulated requirements by 61% to 80% would be adjudged to be ‘Satisfactory.’
However, it stated that projects that meet stipulated requirements by 51% to 60% would be assigned ‘Less Satisfactory,’ and those that meet the requirement by zero to 50% would be assigned the ‘Unsatisfactory’ score.
In case you missed it
Recall on October 25, 2021, the CBN Governor, Godwin Emefiele, announced the introduction of a new financial instrument known as ‘The 100 for 100 PPP’ Policy on Production and Productivity to boost local production and productivity in various sectors of the economy.
Under the initiative, which would be managed by the CBN Development Finance Department, the CBN governor had said, a new set of 100 companies would be rolled out every 100 days and their names would be published in the national dailies for Nigerians to see and confirm.
The initiative by the apex bank is expected to provide support for selected private sector companies in the country as well as part of steps to reverse the country’s overreliance on imports.
The CBN governor pointed out that the initiative was the best and most sustainable way to address the naira’s value whether in hard currency or digital eNaira through production, production and more production
Emefiele had said with the new initiative, CBN would advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, beginning from November 1.