CBN Joins Ministry of Trade, Others on Import Substitution Policies – Mr. Godwin Emefiele, Central Bank of Nigeria (CBN) Governor, has revealed plans through the bank to team up with the Ministry of Industry, Trade and Investment, Ministry of Agriculture and also the National Youth Service Corps (NYSC) in promoting import-substitution policies throughout the country.
Emefiele said this in a keynote address presented at the 48th annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos at the weekend.
The move, according to the CBN governor, would help to reposition the economy in view of the challenges posed by the falling price of crude oil.
He explained: “The CBN is already collaborating with the Ministry of Industry, Trade and Investment as well as the Ministry of Agriculture and Rural Development as well as the NYSC to aggressively begin the first phase of the import substitution programme that would take advantage of the current situation.
“Let me seize this opportunity to call on banks to partner the federal government in encouraging import substitution.”
Emefiele also called on Nigerians to patronise locally manufactured goods and services so as to reduce the pressure on the forex market.
“It beats my imagination to understand why we cannot grow rice, produce milk and sugar in Nigeria. Before I was born, milk was being imported in Nigeria and today it is still being imported.
“So, I ask, does it take rocket science to produce milk in this country? There is no reason for Nigeria to be facing the volatility we are facing today if we had embraced import substitution.
“The central bank will continue to provide resources to support entrepreneurs. Our recently launched N220 billion was meant to support job creation and entrepreneurial development,” he added.
The CBN governor however pointed out that although there was no need for concern over the situation in the international oil market, “there is no need for panic”.
According to him, the recent monetary and fiscal policies would go a long way in sustaining the Nigerian economy on the path of growth.
Emefiele explained: “The CBN took the decision that it would be sub-optimal to continue to heavily deplete the country’s reserves in defending the naira.
“This decision was appropriate because neither the central bank nor the federal government is in control of the major factors causing the depreciation of the nation’s currency.
“Without taking the monetary policy actions we took recently, the gains recorded in terms of price stability would be reversed.”
Continuing, Emefiele said: “The decision to raise the monetary policy rate (MPR) is expected to increase capital flows into the country, which would improve accretion to the reserves.
“The increase in the private sector cash reserve requirement (CRR) would reduce the amount of liquidity available for speculative activities and moderate the pressure in the forex market.
“Shifting the mid-point of the official exchange rate band would reduce the arbitrage tendency in the market and realign it with the rate at the interbank and BDC segments.”
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