LAGOS – Manufacturers in the country can now consider local options in sourcing for raw materials as a result of Central Bank of Nigeria (CBN)’s policy of restricting access to Forex on some items, four of which have at the time, constituted over NI trillion of the country’s annual import Bills, Mr. Godwin Emefiele, the Governor of the nation’s apex bank, has said
Emefiele, who made the declarations while speaking at the 32nd Edition of Financial Correspondents and Business Editors’ Workshop with the theme, ”Exchange Rate Management And Economic Diversification In Nigeria: The Pave (Produce, Add Value and Export) Option”, in Akure, Ondo State at the weekend, said the CBN went further to introduce demand management approaches to conserve the country’s reserves and support the domestic production of certain goods.
He emphasised that the CBN tight monetary policy regime is achieving its intended outcome of containing inflation and cushioning the impact of the drop in the supply of foreign exchange in the economy.
The CBN Governor, who was represented by Mr. Edward Adamu, Deputy Governor of CBN, said the apex Bank listed other measures to include partnership with commercial banks to go after Nigerians who falsely bought dollars under the pretense of traveling abroad and ended up roundtripping.
According to Emiefele, the apex Bank also established an Investors and Exporters Window (I&E), to allow for purchase and sale of Forex at prevailing market rate and moved further to liberalise the Foreign Exchange Market through the operationalization of the “Revised Guidelines for the Operation of Nigerian Inter-bank Foreign Exchange Market” in June 2016.
He said: “The Central Bank of Nigeria (CBN) had also sanctioned Bureau De Change (BDC) operators for illegal forex trading and discontinued the sale of forex to the Bureau operators in Nigeria, while licensing of new BDCs was suspended.
“The CBN also introduced the ‘Naira 4 Dollar Scheme’ to encourage diaspora remittances, and as a result of the demand management policy, the naira has remained largely stable at the I & E window, particularly since the discontinuation of FX allocation to Bureau De Change operators along with the convergence between the CBN and NAFEX rates”
He explained that Commercial Banks are now able to meet the demands of their customers seeking forex for SMEs, school fees, medical and PTAs, revealing that the nation’s current account deficit has narrowed significantly due to a surplus position in the goods account.
“The surplus position in the goods account is occasioned by a reduction in imports, increase in crude oil and gas export receipts, and improvement in remittances. Remittance inflows have been supported by our ‘Naira for Dollar’ scheme, and we have seen a surge in remittance inflows.
“In our sustained effort to reduce foreign exchange demand pressure and facilitate investment, the CBN on April 27, 2018, signed a 3-year bilateral currency swap agreement of US$2.5 billion, equivalent to ¥15.0 billion or N720.0 billion with the Peoples Bank of China (PBoC.)” he said.
The CBN Governor noted that these policies are yielding positive results in terms of meeting genuine demand for foreign exchange and exchange rate stability.
“As part of its long-term strategy for strengthening the Nigerian economy, the CBN established specific initiatives to resolve the underlying factors acting as challenges to long-term GDP growth and economic productivity.
“In this case, the Bank deployed some measures to increase credit allocations to pivotal productive sectors of the economy at reasonable interest rates, with a view to diversifying the base of the economy, stimulating output, creating jobs and significantly reducing import bills.
“Further to our conviction that the banking sector must pay attention to providing long-term finance for infrastructure development in the country, InfraCorp has been established by the Central Bank of Nigeria in partnership with African Finance Corporation and the Nigerian Sovereign Investment Authority.
“InfraCorp would enable the use of mostly private capital to support infrastructure investment that will have a multiplier effect on growth across critical sectors.
“Within the CBN, our methods (especially in the management of financial system liquidity, FX market and development financing initiatives) have been able to optimally balance the delicate objectives of price stability and real output growth.
“In our desire to create jobs and diversify the economy away from crude oil, we have established numerous intervention programmes, such as Anchor Borrowers Programmes (ABP), Commercial Agricultural Credit Scheme (CACS), Creative Industry Financing Initiative (CIFI), MSMEDF, CBN Agribusiness, Small and Medium Enterprises Investment Scheme (AgSMEIS) and the Real Sector Support Facility (RSSF), among others with remarkable success in accelerating growth of the economy and reducing poverty across the country”, he said
Emefiele emphasised that the CBN in consultation with the Banking Community, announced the Bankers’ Committee “RT200 FX Programme”, which stands for the “Race to US$200 billion in FX Repatriation”.
The RT200 FX Programme is a set of policies, plans and programmes for non-oil exports that will enable us to attain our lofty yet attainable goal of US$200 billion in FX repatriation, exclusively from non-oil exports, over the next 3-5 years.
“The five key anchors of the RT200 FX Programme are Value-Adding Exports Facility,Non-Oil Commodities Expansion Facility, Non-Oil FX Rebate Scheme, Dedicated Non-Oil Export Terminal and Biannual Non-Oil Export Summit Monetary”