Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, stated yesterday during the bi-monthly Monetary Policy Committee (MPC) meeting in Abuja, that any move to float the naira is tantamount to a disaster for the economy.
Emefiele’s comment came as an indirect response to People Democratic Party’s Presidential aspirant, Mr Atiku Abubakar, who, last week, criticised the CBN’s policies under the current CBN Governor.
Recall that Atiku had also threatened to sack the man if he eventually wins the February 2019 presidential election.
Meanwhile, in his reaction, Mr Emefiele said that Monetary Policy Committee members reviewed Mr Atiku’s plan before concluding that it would be a bad move.
“Normally, the Central Bank as an independent institution is apolitical but it is also important that at the MPC meeting today we asked ourselves if there is any merit in it to begin to say that we should look at free-floating the currency or that we should allow free import of goods that we have restricted. The MPC came to a conclusion that this was a wrong premise.
“We cannot be talking about allowing import of items that can be produced in the country today, exporting jobs from Nigeria to foreign countries, and we say we have the interest of Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say that you will allow imports to just flood the country just because you want to please anybody. It is not in our interest.”
Speaking further, the CBN boss argued if the exchange rate becomes free float, it would result in the following negative implications:
- It will result in capital flight from the country.
- Lead to a massive depreciation/devaluation of the naira.
- Cause a currency crisis in Nigeria.
The CBN Governor then went further to state that the apex bank is getting even more aggressive in its bid to curtail the importation of goods into the country.
And still in a subtle reaction to Mr Atiku’s criticism, Emefiele stated that he has done well as CBN’s Governor. He backed this up by citing the construction of Dangote Refinery, which he implied might never have happened if not for the policy direction taken by the CBN on importation. And as the refinery nears completion, Emefiele is hopeful that Nigeria will end the importation of fertiliser soon.
He concluded by saying that the CBN has always been apolitical and will try as much as possible to remain that way. However, whenever it is dragged into political matters, the apex bank will always clear its name, Emefiele said.