Non-oil Export: CBN, NEXIM Partner On N500bn Fund
BY COBHAM NSA, UYO – The Central Bank of Nigeria (CBN) says its N500 billion fund partnership with the Nigeria Export-Import Bank (NEXIM) will boost activities of local manufacturers interested in growing the nation’s non-oil export sector.
This is even as the apex bank insists on transparency as the Federal Government and all stakeholders work on addressing the pitfalls that saw Nigeria sliding into recession in 2016.
CBN Governor, Godwin Emefiele, who spoke at the at the 25th seminar for Finance Correspondents and Business Editors, Uyo, Akwa Ibom State on Monday, said the apex bank will not relent in promoting the gains in local production while giving impetus to activities in non-oil exports.
Represented at the event by Mr Edward Adamu, newly appointed Deputy Governor, Corporate Services of the bank, Mr Emefiele said the move is part of CBN’s strategies at aligning with the federal government’s efforts to steer the economy away from oil dependence.
He also hinted that on-going work by the apex bank will see Nigeria’s foreign exchange reserve hitting the $50 billion mark from the current figure of $46.2billion as at March 2018 ending.
Against the backdrop of government’s moves at diversifying the economy from its over-dependence on oil, Emefiele said; “The first thing we need to do is to remain vigilant. Those of us who has been entrusted with leadership and policymaking responsibilities must neither become complacent nor over-confident. We must strive to improve and sustain the same policies that has gotten us this far.”
He said the country’s import bill may have dropped drastically, but “our manufacturing and agriculture sectors still have a long way to go if we must attain self-sufficiency in those sectors”, and warned that; “We must not be quick to discard the restrictive measures which aided our recovery simply because the metrics have improved. At the CBN we will continue to fine-tune our policies and strategies based on our understanding of evolving developments and supported by in-house technical analysis and simulations. We will remain proactive in ensuring that the welfare of Nigerians is optimised at any point in time.”
The Governor explained that the monetary policy front has seen the apex bank embarking on a cycle of policy tightening to rein in inflation using increasing Monetary Policy Rate (MPR) and aggressive Open Market Operations; just as he admitted that external reserves management has seen the CBN adopting demand management through the restriction of FX for imports of 41 items, which we believed could be produced locally.
He also said Monetary Policy Rate (MPR) retention at 14 percent was part of CBN’s robust monetary and exchange rate policy as signposted by the last Monetary Policy Committee (MPC) meeting, whose decision clearly demonstrates its resolve to sustain the tight policies that have helped rein-in inflationary pressures.
“We will also continue the transparency and evenhandedness that has attracted inflows of FX into the country while keeping FX supply to the market adequate”, Emefiele said
The CBN Governor said on the basis of these policies and barring any unexpected shocks, expectations are that inflationary pressure will continue to ease with a likely return to very low double digit or high single digit levels during the year.
On intervention in Development Finance, the Governor said the CBN will ensure continuous provision of access to much-needed credit to sectors with the potential to create jobs on a mass scale, adding that the Bank has maintained the tempo financing activities in key high-impact sectors like Power, Aviation, Education, MSME, Agriculture, including CACs, ACGS, NIRSAL anf the Anchor Borrower Programme among others.
According the CBN Governor, “In this regard, we will explore opportunities to expand the highly-successful Anchor Borrowers’ Programme to other crops and States. In order to continue our gains in local production and help boost non-oil exports, we are in the process of finalizing the creation of a N500 billion fund with the Nigeria Export-Import Bank (NEXIM) to assist local manufacturers interested in non-oil exports.”
Similarly, Emefiele said the country’s Economic Recovery will consolidate as sentiments improve in the macro economy, fully supported by proactive monetary, trade, industrial and fiscal policies, adding; “We expect a continued uptick in GDP growth with a positive spillover to improved unemployment rate. As policies to strengthen the agricultural and industrial sectors become more emergent growth in these sectors will rise, further bolstering overall economy.”
The CBN Governor, who is optimistic that the Exchange Rate stability will persist, said; “As we entrench and sustain the transparency in the FX market, as FX reserves accretion continues, and market confidence and improved sentiments remain, we expect that the exchange rate will not only be stable but would begin to appreciate against major currencies. The adverse competitiveness outcome which such appreciation may entail would be adequately mitigated by proactive policies to ensure that our balance of payments position is not undermined.”
He stated that efforts are also focused on re-doubling strong policy coordination, collaboration and cooperation which flourished during the very difficult times, stressing that “To sustain our recovery, the need is greater now than ever for robust policy coordination between the key aspects of economic policy making space. This would include fiscal, monetary, exchange, and trade policies, which must be targeted at protecting farmers to boost agricultural outputs, support local companies and enhance manufacturing and industrial capacities, with a view to diversifying the economy away from oil and fossil fuels.”
