{"id":65347,"date":"2019-03-08T20:00:53","date_gmt":"2019-03-08T19:00:53","guid":{"rendered":"http:\/\/pointblanknews.com\/pbn\/?p=65347"},"modified":"2019-03-08T20:00:53","modified_gmt":"2019-03-08T19:00:53","slug":"emefiele-and-the-stakes-at-cbn","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/articles-opinions\/emefiele-and-the-stakes-at-cbn\/","title":{"rendered":"Emefiele and the stakes at CBN"},"content":{"rendered":"<div id=\"m8490903862506502862\" class=\"mail-message expanded\">\n<div class=\"mail-message-header spacer\"><\/div>\n<div class=\"mail-message-content collapsible zoom-normal mail-show-images \">\n<div class=\"clear\">\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 By Sufuyan Ojeifo<\/p>\n<p>As the\u00a0central\u00a0bank\u00a0and apex monetary authority of\u00a0the country,\u00a0the major<br \/>\nregulatory objectives of the\u00a0Central Bank of Nigeria (CBN) as mirrored in<br \/>\nthe institution\u2019s enabling Act are to maintain the external reserves of<br \/>\nthe country, promote monetary stability, a sound financial environment and<br \/>\nto act as a banker of last resort.<\/p>\n<p>In this strategic turf of central banking, the establishment must adroitly<br \/>\nread and proactively react to a laundry list of fluid scenarios, which<br \/>\ninclude geopolitical and trade tensions that unquestionably impact the<br \/>\ndynamics of global trade. These strains often spawn threats to<br \/>\nmacro-economic stability and even the monetary policy footing of the<br \/>\nnation.<\/p>\n<p>For instance,\u00a0a combination of factors, including financial market<br \/>\nvolatilities, trade war between the US and key allies, continuing monetary<br \/>\npolicy normalization by the US, BREXIT, the termination of the European<br \/>\nCentral Bank\u2019s (ECB) asset purchase programme in December 2018 and the<br \/>\nslowdown in the Chinese economy, has further heightened uncertainties for<br \/>\nthe global economy in 2019. Consequently, global growth has been<br \/>\ndowngraded by the IMF to 3.5 per cent in 2019 from 3.7 per cent in 2018.<\/p>\n<p>To manage this seismic environment requires a bold, well-informed and<br \/>\nexperienced administrator on duty. Tossed in the circumspect engagement<br \/>\nwith aggravations seeded by rising tendencies and incidences of<br \/>\nprotectionism, new nationalism and anti-globalisation &#8211; especially in the<br \/>\nwestern hemisphere &#8211;\u00a0 it\u2019s then clear that greenhorns have no business in<br \/>\nthe apex bank\u2019s command room.<\/p>\n<p>No less a juggler\u2019s nightmare, among other critical regulatory<br \/>\nresponsibilities, tracking monetary-cum-fiscal policy parameters in the<br \/>\nturbulent sea of financial world and making delicate adjustments as<br \/>\nnecessary with the ship of state steaming at full speed requires no less a<br \/>\nnavigator with adroit multi-tasking skills and a cool head. Leadership<br \/>\ncontinuity at the helm is also crucial to avoid the consequences of<br \/>\nchanging captain mid-voyage.<\/p>\n<p>It is to this complex, fluid turf of apex banking, that the CBN Governor,<br \/>\nMr. Godwin Emefiele, CON, has brought over three decades of both<br \/>\ntheoretical and practical experience from top-flight academic and hands-on<br \/>\nbanking turfs to. In a change regime, Emefiele has admirably deployed<br \/>\ngovernance skills groomed in the stern, high-octane financial industry, in<br \/>\neffectively driving CBN\u2019s command room these past five years.<\/p>\n<p>To critical industry stakeholders, this unassuming banking sage certainly<br \/>\ndeserves kudos for keeping faith and demonstrating uncommon commitment and<br \/>\nprofessionalism in a particularly challenging period of the national<br \/>\njourney. Governor Emefiele\u2019s track record of remarkable performance at the<br \/>\nnation\u2019s apex bank strongly recommends the renewal of his tenure by the<br \/>\nfederal government.<\/p>\n<p>Logic and reason reinforce this position. As of June 3, 2014 when Emefiele<br \/>\nassumed office, Nigeria\u2019s reserves had fallen from a peak of US$62b in<br \/>\n2008 to US$37b! But following the sharp drop in crude oil prices, the<br \/>\nnation experienced a plummeting of the CBN\u2019s monthly foreign earnings from<br \/>\nas high as US$3.2 billion to\u00a0as low as US$700 million monthly. To avoid<br \/>\nfurther depletion in the reserves, the CBN took a number of countervailing<br \/>\nactions including the prioritization of the most critical needs for<br \/>\nforeign exchange.<\/p>\n<p>In this regard, and in order of priority, it decided to provide the<br \/>\navailable but highly limited foreign exchange to meet important needs such<br \/>\nas matured letters of credit from commercial banks, importation of<br \/>\npetroleum products, importation of critical raw materials, plants, and<br \/>\nequipment, payments for school fees, BTA, PTA and related expenses.<\/p>\n<p>Over the intervening period, it is heartening to note that these policies<br \/>\nyielded positive results. In particular, the CBN managed to stabilise the<br \/>\nexchange rate around February 2015, thereby creating certainty for both<br \/>\nhousehold and business decisions. It largely eliminated speculators and<br \/>\nrent-seekers from the Foreign Exchange Market.<\/p>\n<p>Reserves, despite having fallen, were still robust and able to cover about<br \/>\nfive months of Nigeria\u2019s imports as against the international benchmark of<br \/>\nthree months. The domestic production of items prohibited from the Foreign<br \/>\nExchange (FX) market is picking up nationwide, thereby creating more jobs<br \/>\nfor many more Nigerians.<\/p>\n<p>The demand for foreign exchange by mostly domestic importers has risen<br \/>\nsignificantly. For example, the last time the nation had oil prices at<br \/>\nabout US$50 per barrel for an extended period of time was in 2005. At that<br \/>\ntime, the average import bill was N148.3 billion per month. In stark<br \/>\ncontrast, Nigeria\u2019s average import bill for 2015 was over N1 trillion<br \/>\nmonthly, though oil prices are now less than US$60 per barrel but picking<br \/>\nup.<\/p>\n<p>The net effect of these combined forces unfortunately is the depletion of<br \/>\nthe nation\u2019s foreign exchange reserves. The stock of Foreign Exchange<br \/>\nReserves had declined to around US$25.4 billion.<\/p>\n<p>Further,\u00a0as part of its long-term strategy for strengthening the Nigerian<br \/>\neconomy, the Central Bank established specific initiatives to resolve the<br \/>\nunderlying factors goading challenges to long-term GDP growth, economic<br \/>\nproductivity, unemployment and poverty that had pervaded the economy over<br \/>\nthe past decades. Measures were taken to increase credit allocations to<br \/>\npivotal productive sectors of the economy. This is with a view to<br \/>\nstimulating increased output in these sectors, creating jobs on a mass<br \/>\nscale and significantly reducing import bills.<\/p>\n<p>These targeted interventions have so far impacted such sectors as<br \/>\nagriculture, power, micro, small and medium-scale enterprises (MSMEs),<br \/>\nworkers\u2019 salary\/pensions assistance fund, infrastructural assistance for<br \/>\nstates, emergency fiscal spending, improving FX supply and financial<br \/>\ninclusion<\/p>\n<p>This week, Emefiele, during a meeting with textile manufacturers and<br \/>\ncotton farmers, announced the inclusion of textile products on the long<br \/>\nlist of items restricted from foreign exchange (FX) for import into the<br \/>\ncountry. The restriction order, which takes immediate effect, has brought<br \/>\nthe number of such items to 44. It could be recalled that earlier this<br \/>\nyear, cement and tomatoes paste were added to the list.<\/p>\n<p>His words: \u201cEffective immediately, the CBN hereby places the access to FX<br \/>\nfor all forms of textile materials on the FX restriction list.<br \/>\nAccordingly, all FX dealers in Nigeria are to desist from granting any<br \/>\nimporter of textile material access to FX in the Nigerian foreign exchange<br \/>\nmarket. In addition, we shall adopt a range of other strategies that will<br \/>\nmake it difficult for recalcitrant smugglers to operate banking business<br \/>\nin Nigeria.\u201d<\/p>\n<p>He explained to his rapt audience why textile products had to be included<br \/>\non the forex restriction list: His words: \u201cToday, Nigeria currently spends<br \/>\nabove $4 billion annually on imported textiles and ready-made clothing.<\/p>\n<p>&#8220;With a projected population of over 180 million Nigerians, clearly the<br \/>\nneeds of the domestic market are huge and varied, with immense prospects,<br \/>\nnot only for job creation, but also for growth of the domestic textile<br \/>\nindustries.<\/p>\n<p>&#8221; A quick example that highlights the potential of this local market is<br \/>\nthe need to support the provision of uniforms and clothing apparels for<br \/>\nschool students, military and paramilitary officers as well as workers in<br \/>\nthe industrial sector.&#8221;<\/p>\n<p>All these policy measures by the Emefiele-led CBN were conceptualized and<br \/>\ndeployed in boosting the Nigerian economy and aiding the economic<br \/>\ntransformation effort of the Muhammadu Buhari administration.\u00a0Little<br \/>\nwonder, the emerging consensus is that to sustain CBN\u2019s nimble governance<br \/>\ntrajectory under Emefiele\u2019s nous and vision, continuity is key.<\/p>\n<p>* Ojeifo contributed this piece from Abuja via\u00a0<a href=\"mailto:ojwonderngr@yahoo.com\" target=\"_blank\" rel=\"noopener noreferrer\">ojwonderngr@yahoo.com<\/a><\/p>\n<p>Sufuyan OjeifoEditor- in- ChiefThe Congresswatch Magazine+234 8034727013<br \/>\n+234 8023024800<\/p>\n<\/div>\n<\/div>\n<div class=\"mail-message-footer spacer collapsible\"><\/div>\n<\/div>\n<div id=\"conversation-footer\" class=\"spacer\"><\/div>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content --><!-- AddThis Related Posts generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 By Sufuyan Ojeifo As the\u00a0central\u00a0bank\u00a0and apex monetary authority of\u00a0the country,\u00a0the major regulatory objectives of the\u00a0Central Bank of Nigeria (CBN) as&hellip;<!-- AddThis Advanced Settings generic via filter on wp_trim_excerpt --><!-- AddThis Share Buttons generic via filter on wp_trim_excerpt --><!-- AddThis Related Posts generic via filter on wp_trim_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":56737,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-65347","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-opinions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - 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