The Central Bank of Nigeria (CBN) has unveiled selection criteria for private sector companies to participate in its new financial instrument tagged, ‘The 100 for 100 PPP — Policy on Production and Productivity’.
The apex bank made this known on Sunday in a document released and signed by Yusuf Yila Philip, CBN’s director, development finance.
Under the new policy, Godwin Emefiele, CBN governor, had said the apex bank would advertise, screen, scrutinise and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021.
The CBN said that criteria for participation would be on the business’ contributions to economic growth, jobs creation, and social impact.
It added that in selecting the companies, evidence-based, transparent and measurable criteria shall be deployed.
According to the CBN, the move was 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.
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“These are projects that must catalyse sustainable employment-led economic growth through increased domestic production and productivity in the near term,” the document reads.
The document listed the following:
NEW PROJECTS
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.
It noted that the broad objective of introducing the instrument was to reverse the nation’s over-reliance on imports, by creating a platform that targets and supports the right companies and projects with the potential to immediately transform and jumpstart the productive base of the economy.
The 100 for 100 PPP, according to the CBN, shall provide naira intervention funding under existing CBN intervention processes and complete foreign exchange funding for new machinery.
“This instrument is for only new projects; will not cover any refinance of existing facilities and will be subject to an independent evaluation by international audit firms,” the document adds.
PUBLICATION OF INTERVENTIONS
All interventions under this project will be made public and published in national dailies.
It listed the key areas of focus the financial instrument would fund to include production efficiency and scalability; local content capacity; job creation and human capital development and contribution to economic growth.
3 YEARS AUDITED FINANCIAL REPORTS
The bank listed historical financial performance — three years of the audited report of the company, viability of the business and creditworthiness of directors as some of the requirements to be considered.
BUY LOCAL
According to the CBN, 80 percent of jobs created by such projects must be for Nigerians while 50 percent of raw materials for the project must be sourced locally.
It said the projects must have an impact on key macroeconomic indicators and global export earning potential, as well as its contribution to gross domestic product (GDP) potential, the share of the domestic market, foreign exchange earning potential and ease of exports.
It noted that a highly satisfactory project should meet stipulated requirements by 81 to 100 per cent; a satisfactory project meets stipulated requirements by 61 to 80 per cent; a less satisfactory project meets stipulated requirements by 51 to 60 per cent while an unsatisfactory project meets stipulated requirements by zero to 50 percent.
The CBN said it 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.
The CBN advised interested companies with satisfactory performance to apply through their banks effective, today November 01, 2021, to the CBN department of development finance, office of the governor, Central Bank of Nigeria, central business district, Abuja with complete documentation.