12, 2017 / 05:15PM / CBN
The Governor, Central Bank of Nigeria (CBN), Mr.
Godwin Emefiele says the dogged implementation of the Bank’s policy, which
restricts importers of certain items access to foreign exchange from the
Nigerian Forex market, has led to improvements in the domestic production of those
items and a reduction in Nigeria’s import bill.
Delivering the 2017 Annual Bankers’ Dinner of the Chartered Institute of
Bankers of Nigeria (CIBN) in Lagos at the weekend, Mr. Emefiele asserted that
local manufacturers were recording profits and major boosts to their revenue
due to the policy.
According to him, in spite of opposition to the introduction of the
policy restricting 41 items from Nigeria’s foreign exchange market, the
faithful implementation of the policy had seen to the considerable decline in
Nigeria’s import bills. From an average of about US$5.5 billion, he disclosed
that the nation’s monthly import bill had fallen consistently to US$2.1 billion
in 2016 and US$1.9 billion by half year 2017.
Citing the example of Psaltry International Limited (PIL), an
agro-allied company based in Oyo State, he said the introduction of the policy
had reversed the fortunes of the starch-producing company. He noted that prior
to the policy; Psaltry had only few customers and a huge backlog of inventory.
However, due to the policy, he disclosed that the company now has over 50
multinational clients including Nestle and Unilever, thereby saving the country
$7 million in foreign exchange drawdown over the two years of the policy.
While also asserting that the access restriction policy had freed
Nigeria from the perennially embarrassing importation of toothpicks, the CBN
Governor disclosed to the delight of the audience that as part of the gains
from the policy and in line with an agreement reached with Unilever, which
moved its production facility to another country a few years ago, the company
had agreed to commission a new Blue Band Factory in Agbara, Ogun State before
the end of 2017.
Mr. Emefiele further disclosed that the implementation of the policy had
had a great impact on Nigeria’s import bill and boosted local rice production
in Nigeria. He recalled that Nigeria, in 2012, imported about 1.2 million
metric tonnes of rice from a trading partner, noting that, in 2016, one full
year of implementation of the policy, rice exports to Nigeria had fallen by 99
percent to only 784 metric tonnes.
“These are clearly verifiable successes of government’s attempts to
create jobs locally, improve the wealth of our rural population, improve
industrial capacities and ultimately attain economic growth in Nigeria,” he
On the current position of the economy, Mr. Emefiele expressed delight
that the Nigerian economy had recorded positive growth after five consecutive
quarters of negative growth, thereby signaling its exit from recession. He also
noted the downward trend in headline inflation from 18.72 per cent in January
2017 to the September 2017 figure of 15.98.
The CBN Governor equally expressed gladness that the Naira had
appreciated from over N500/US$1 to about N360/US$1. While noting that the
economy had seen stability in the exchange rate of the naira for over six
months, he affirmed that the exchange rate was not only stable, but was also
converging across various windows and segments of the market.
He noted that since the establishment of the Import and Export Window,
the CBN had recorded about US$10 billion in autonomous inflows through this
window alone. According to him, this reflected the effect of the increased
transparency which that window accorded the foreign exchange market and its
impact of improving investor confidence and business sentiments.
Speaking on the country’s reserves, Emefiele noted that the reserves had
recovered significantly from about US$23 billion in October 2016 to over
US$34.3 billion as at November 3, 2017.
“The accretion in reserves does not only reflect increased inflow but
also our shrewd FX demand management strategy,” he added
In assessing the country’s rating on the ease of doing business, he
disclosed that the World Bank’s ease of doing business indicator for 2018
showed that Nigeria, with a score of 52.03, improved 24 places to rank 145 out
of 190, standing above the regional average score of 50.43 recorded for sub-Saharan
Africa. This is even as he noted that the Bank’s effort had reinforced the
Presidential initiatives to improve ease of doing business in Nigeria.
Speaking on the economic outlook for 2018, Emefiele warned fiscal and
monetary authorities against complacency and over-confidence because of current
positive developments in the economy. Rather, he urged all to strive to improve
and sustain the pace of recovery.
Although he noted that the import bill had dropped, he stressed that Nigeria’s
manufacturing and agriculture sectors still had a long way to go if the country
were to attain self-sufficiency in those sectors. Nevertheless, he assured that
the CBN, on its part, would continue to fine-tune its policies and strategies
based on its understanding of evolving developments and supported by in-house
technical analysis and simulations. He assured that the CBN would remain
proactive in ensuring that the welfare of Nigerians is optimised at any point
Specifically, Mr. Emefiele noted that, that barring any unforeseen
shocks, Inflationary pressure will continue to ease, expressing optimism that
the rate may return to very low double digit or high single digit levels during
the next year. He also expressed hope that the foreign exchange reserve will
continue to grow; stressing that Nigeria can attain a foreign reserve position
of about US$40 billion by end of 2018.
Mr. Emefiele also expressed hope that the economic recovery would
consolidate and that the exchange rate stability currently being witnessed
would continue. While expressing hope for even stronger policy coordination,
collaboration and cooperation in 2018, he hinted that monetary policy stance
could change when the
underlying fundamentals become supportive.
While expressing delight that some of the pains that were associated
with some of the CBN’s policies had become major gains in Nigeria’s economy,
Mr. Emefiele urged all stakeholders to work towards creating a Nigeria, where
balanced growth and shared prosperity is guaranteed for all.