The home-grown monetary and development-oriented policy of the Central Bank of Nigeria (CBN) is gradually steering the Nigerian economy towards the path of growth. The policy, according to Godwin Emefiele, Governor of CBN, has brought stability in the country’s foreign exchange market, strengthened the value of the Naira, ameliorated the inflationary rate and enabled the apex bank to deploy N2trillion as intervention fund for food production and the development of the agricultural value chain as well as the Small and Medium Enterprises (SMEs) and the manufacturing sector.
One of the key elements of the home-grown policy is the adoption of demand management Forex regime, which includes the introduction of Investors and Exporters’ (I&E) Forex window. “We are developing home-grown solutions because we have our own peculiarities. I believe that with hard work, Nigeria would get better,” Emefiele said. The CBN, he added, has opened the forex market for more people to key into the policy, “That was why we introduced the ‘I & E’ window. We said if you want forex you can go to that market and buy it once it fits the pricing structure of the goods or whatever you want to do,” he said.
The introduction of the ‘I&E’ window has also helped in complementing the flow of Forex into the market and has resulted in the appreciation of the Naira from N525 to the dollar to N360 to the dollar between February and July 2017.
According to him, the CBN feels gratified to have seen a movement from as high as over N500/$1 and converging heavily southward to its present value. “All we need to do is to keep monitoring the market and ensuring that if there are certain areas we need to address, we address them. By doing that, we would see more flows into the economy, which would help grow the economy,” Emefiele said.
The apex bank boss added that the home-grown solution has enabled Nigeria to fare better than some African countries that were enmeshed in foreign exchange crises in 2016. “Now, compare Nigeria and Egypt. In October 2016, Egypt’s inflation was 13 per cent. But in April 2017, Egypt’s inflation had grown to 31 per cent. I can tell you that at 18 per cent, Nigerians had been complaining that what are these people (CBN) doing. It got to 18 per cent and we started to take certain actions to reverse it. So, that would tell you that we are adopting our own home-grown solutions and you can see whether it is working or not,” he explained.
Emefiele, however, said that there was no going back on the restriction imposed on 41 items which were banned from accessing Forex from the interbank market due to the need to set aside foreign exchange for the importation of items that could not be produced locally, especially when there is a scarcity of foreign exchange. “My view, which is the view of government, is that there are certain items that we can produce locally. But by importing some of these items, you impoverish the people. How can we create jobs for our people by living like that! What we did by reversing from producing and exporting palm oil, into importing palm oil, was that we impoverished those palm oil farmers. What we did by importing rice, when we know that we can produce rice, was that we impoverished the poor rice farmers in Abakaliki, in Kebbi, Sokoto, Katsina and other rice-producing areas,” Emefiele explained.
According to him, the government policy on support for local production is gaining ground and attracting multinational companies who are now investing in rice production. “We have seen multinationals coming to say they want to join in palm oil production. For instance, in Cross River State, PZ Wilmar has been cultivating 58,000 hectares of palm plantation; Presco, Okomu are all doing something. So, if a PZ Wilmar needs foreign exchange because there is a little gap, I will not mind giving them because I have seen the interest they have shown cultivating more land,” he said.
He, however, stressed the need for the Federal Government to continue to implement policies that would help diversify the economy from oil to agriculture and the real sector.
By Dike Onwuamaeze