The Governor of the Central Bank of Nigeria (CBN), Mr. Gowdin Emefiele has dismissed reports that the planned FOREX restrictions on food items import in Nigeria will further dampen the country’s chances of benefitting from the recently signed African Continental Free Trade Agreement (AfCFTA).
The CBN Governor disclosed this while speaking with State House correspondents at the retreat organised for ministerial designates in the Presidential Villa in Abuja on Monday. Emefiele had earlier affirmed the Presidency’s announcement at the event, having kept mum for almost a week.
Effect of the ban on AfCFTA: The CBN Governor was quizzed on how the latest restriction on food importation may affect Nigeria’s potential benefit from AfCFTA. Emefiele stated it would not affect the content of the AfCFTA just as agreement was still ongoing and the terms of engagement were still being discussed and negotiated.
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“The ban will not affect the content of the AfCFTA, in any case the AfCFTA is an agreement that is ongoing, the terms of engagement are still being discussed and negotiated.
“The important thing is that Nigeria needs to stand as the largest economy in Africa and the largest populated countries in Africa, we need to stand and dictate the terms under which we want to be in it and this is what we are saying. But what I am saying is that it is wrong, it is inappropriate that an item that can be produced in Nigeria should be imported into Nigeria.”
Job Creation: According to Emefiele, restricting FOREX on importing certain items that can be produced in Nigeria is also fundamental to Nigeria’s chances. While Emefiele admitted that there are challenges ahead, he, however, noted that job creation is paramount to the bank at the moment.
“When we get into the AfCFTA issues, we will also look at the details of it, but at this time, we are saying we need to create jobs for our country, for the youths and we need to create jobs. We yearn for growth and the only way we can really accelerate growth in a Nigeria between now and next four years is to see to it that items that can be produced in Nigeria are indeed produced in Nigeria rather than being imported into the country.”
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Analysts disagreed: Reacting on how FOREX restriction on food imports can affect the Nigerian economy, Cobus de Hart, a Chief Economist at NKC African Economics, as quoted by Financial Times (FT) revealed that the President’s call for a currency ban cast doubt on Nigeria’s commitment to a landmark continent-wide trade agreement, which it signed last month after more than a year of delay.
The move “stands in stark contrast to the strategy outlined in the Africa Continental Free Trade Area agreement, and this policy will certainly not set Nigeria’s agricultural sector up to take full advantage of a liberalisation of trade barriers across the continent,” Mr de Hart wrote in a research note.
Amaka Anku, Africa Director for the Eurasia Group, stated that whether the policy was implemented or not, it was sending a troubling message for an economy suffering from high unemployment, low foreign direct investment and sluggish growth.
“Most actors, especially the Central Bank, should know that a total ban of food imports is not practical and I doubt that will be the policy.
“But his comments will continue to drive home the sense that Buhari has no idea how to manage an economy and will raise uncertainty about what other [foreign exchange] restrictions are coming and contribute to already low business confidence.”
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