CBN Governor Defends New FX Control

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Mr. Godwin Emefiele - the Governor of the Central Bank of Nigeria,  has defended the decision of the central bank to tighten foreign exchange controls by excluding 40 items comprising rice, toothpicks, cement, margarine, palm kernel oil, Vegetable oil, meat and processed meat products, etc, from the interbank forex market. In order to reduce the pressure on the naira while preserving external reserves, importers of such items would have to source their fx requirements from private channels or the bureau de change (BDC) segment of the market.

In a statement on Wednesday, CBN Governor, said the country spends an estimated N1.3 trillion on items that could be manufactured locally, adding that Nigerians need to have a soul-searching conversation on the impact the import regime has on the economy in the areas of industrialization and job creation. He however, explained that it was necessary to shed more light on the rationale behind the policy, “in view of the announcement we made yesterday to exclude more items from accessing foreign exchange at the interbank market”. In the case of yesterday’s announcement, I am happy to inform and underscore that this policy change is in line with my long-held belief that Nigeria cannot attain its true potential by simply importing everything. At some point, we have to all decide what we really want for our country, and I believe that the time is now right for that deep and honest conversation. - CBN Governor

I also noted that despite Nigeria’s relatively impressive GDP growth rates over the past seven years, there seems to be an absence of a corresponding reduction in unemployment or poverty.

My personal as well as the Bank’s institutional analyses of the situation compelled us to believe that we needed to aggressively begin the process of feeding ourselves by ourselves and producing much of what we need in this country. And in order to begin this process, the CBN took measures to increase credit allocations to pivotal productive sectors of the economy with a view to stimulating increased output in these sectors, creating jobs on a mass scale and significantly reducing our import bills. Would be  a new dawn in economy of Nigeria? more update later....