The Central Bank of Nigeria (CBN) governor, Mr. Godwin Emefiele, has finally responded to the President’s pronouncement on foreign exchange (FOREX) restriction for food importation, stating that more items will be banned to save FOREX.
While speaking with State House correspondents at the retreat for ministerial designates in the Presidential Villa, Emefiele affirmed the President’s announcement, disclosing that the President’s action is in the logic of CBN’s management foreign exchange policies that started since 2016.
Affirming FG’s position: Speaking at the event, Emefiele reportedly stated that the move is an attempt to stop the importation of items that Nigeria has the capacity to produce, stressing that the country’s foreign reserves should not be wasted on importing food items. Emefeile disclosed:
“Let me say this, Mr. President’s comment on the issuing of forex to people who import food items into the country is in the logic of CBN’s management foreign exchange policies that we started since 2016.
“If you recall, we started with about 41 items (food and non-food items), because we believe that those items can be produced in the country.
As we stand today, there are about 43 items on that list and I will say substantially most of them are food items.
“We are basically saying if we have a food item that can be produced in the country, why should we waste scare foreign exchange importing those items into the country, when those can be produced in the country?”
Commenting further, Emefiele claimed the president’s speech has been largely misrepresented, describing the criticisms received as unfair and unfortunate.
“It is important for me to say that the attempt to misrepresent the comments of Mr. President is very unfair and unfortunate. But, what we will say from the CBN is that Mr. President has made this comment purely to strengthen the position of the CBN, to say that he believes in what the CBN has been doing since 2016 and there is the need for us to reinforce that going forward.”
The Back story: Last week Tuesday, precisely 13th of August, President Muhammadu Buhari through his spokesman, Garba Shehu, announced that he has directed the CBN to stop providing FOREX for the importation of food into the country.
- While controversies trail the pronouncement to ban FOREX for food importation, the Presidency reacted on Sunday.
- As revealed in an earlier publication by Nairametrics, Shehu shed more light on the importation, stating that food importation is not banned as importers are allowed to freely source their own FOREX through other means.
- Specifically, Shehu reacted to the backdrop of criticisms that greeted the proposed policy shift.
More items to be banned: Again, Emefiele disclosed that the CBN would aggressively drive the policy as more items would be banned to restrict food importers from accessing foreign exchange from both the CBN source and the Nigerian banking industry.
“I will say that to honest, we would aggressively go more into the list of items that are being imported into the country, items that can be produced in Nigeria.
I will like to stress that we would ensure that more of these items will get on the list of items that are going to be restricted from accessing foreign exchange in the Nigerian banking industry not just from the CBN source.
“Because, I have heard some comments that maybe it’s about the CBN’s source, it is not the CBN’s source, we are saying you will not be able to access foreign exchange from the Nigerian banking industry because it is important for us to produce these items in Nigeria and we will follow through on them”
Reacting to whether the CBN would amend the policy, Emefiele revealed further that there would be no amendment due to the fact that the high rate of unemployment is traceable to jobs exported from high importation of items that should ideally be produced in Nigeria.
“There will never be an amendment because the issue is this, why should we be exporting jobs to other countries? Today we are complaining that there is a high rate of unemployment, leading to some extent the level of insecurity in the country, why should we allow people to import food that can be produced in the country?
“We need to improve wealth in our rural communities and I am saying we will not change course, we will even be more aggressive on this Programme.” Emefiele was quoted as saying
What next? With the development, it suggests the executive may already be in pole position to give CBN policy direction as widely reported prior to the Emefiele’s affirmation. Recall that policy analysts have widely questioned why the announcement came initially from the federal government and not the monetary policy authority itself.
Interpreting Emefiele’s speech, it does not matter who announces a policy, as long as it synchronises with what the CBN is aiming at. This, therefore, puts a big question on the CBN’s independence which analysts opined to have been “politically erode”.