The Governor of the Central
Bank of Nigeria (CBN), Mr Godwin Emefiele, has
promised to review some aspects of the bank’s
flexible exchange rate policy to allow more
manufacturers and other end users more access to
foreign exchange, after nearly two years of
embargo on importers of 41.
Emefiele, who spoke in Washington DC, USA, after
crucial sessions with foreign investors and other
stakeholders including the International Monetary
Fund (IMF), and the World Bank Group, noted that
though the flexible exchange rate policy was
commended by several stakeholders at the
meetings, there may be need still to review some
aspects of it in the months ahead, to boost job
creation and manufacturing capacity. The policy
change option was coming amidst huge job and
capacity losses in the manufacturing and other
critical sectors of the economy since its
introduction on June 23, 2015.
“We heard the IMF Managing Director Christine
Lagarde, saying there is need to consider further
liberalisation of the Naira, but like I have always
said, the flexible exchange rate regime document
that we have in place is a very sound document
and truly speaking, I have not seen one person
that has criticised it. But what we only have to
talk about is fine-tuning few aspects of it, in
terms of the implementation of the content of that
document. That is why I said we would from time
to time, continue to look at it. As we are looking
at it, I repeat, we would see how we would
continue to fine tune it, to the extent that
whatever we are putting in place would be such
that would benefit Nigerians, and improve their
lives as well as the country.” He said
The CBN boss added that it was important for
Nigerians to underscore the significance of the
various meetings the country’s delegation had
with stakeholders from about 189 countries that
added the World Bank Group meetings on the
country’s economic outlooks and where it was
heading to vis -a -vis, what is likely to be seen in
the immediate, short term and the long run for the
global economy.
He explained “We held meetings with some
groups of foreign investors who have shown
interest in coming into Nigeria, but that they had
few issues with some of our policies which they
want us to address. They liked the fact that we
adopted the flexible exchange rate regime, but
there are some areas they want us to change, and
like I always say, these policies are not cast on
stones. We can always go back and look at them
but what is most important in our mind as we are
trying to look into these policies is that we will
make sure that they are policies that have been
done in the interest of Nigeria and Nigerians. What
is important at this stage is how do we protect
Nigerians. We are committed to ensuring that we
reduce the level of unemployment and what we
can do to ensure that manufacturers continue to
improve their industrial capacities, as well as how
to make it possible for them to get foreign
exchange to run their factory.”
According to the CBN boss, global growth remains
subdued at 3.1 per cent for 2016 in line with
forecast and thinking that in 2017, it would
hopefully grow to about 3.4 per cent.
But, unfortunately, from the African side, Emefiele,
said growth was downgraded to about 1.4 per cent
from about 3.6 per cent forecast at the pervious
meeting in Washington.
He explained that the drag primarily came from big
countries in Africa, particularly Nigeria, South
Africa and Angola which incidentally are all
commodity exporting nations, and so because of
the adverse impact of the commodity prices, they
had what can be called significant drag on the
growth on Africa.
On why Nigeria must ginger its productive sector,
the governor noted that the non -oil and non -
commodity producers which defended their
economies have continued to witness good
growth.
He said “What that means as we talked to our
colleagues is that there is need for us to continue
to put in place policies that will diversify and
reduce dependence on commodities as sources of
livelihood into other areas that are non -
commodities dependent. There is also strong need
for Nigeria and other primary commodities
economies to look at structural reforms and that
as part of the things that the minister has address
quite succinctly about infrastructure, power, roads
and some of the projects that have been stalled
over period of time.”
Emefiele further stated that “A key lessons from
the meetings was that for the emerging markets
and developing countries, there is no one solution
that fits all which also underscores the need for
all go back and think of what kind of policies that
we think can be put in place to help our
economies”.
He said the Nigerian team also held meetings on
the sidelines with delegations from central banks
from different countries to see how the CBN can
also collaborate with them on the bilateral
currencies transactions raising optimism that this
will yield some result.
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