The Central Bank of Nigeria (CBN) has disagreed with the International Monetary Fund (IMF) on the impact of the closure of Nigerian land borders. The apex bank said the closure encouraged foreign direct investment (FDI) and boosted local production.
The CBN Governor, Mr Godwin Emefiele, while speaking at a press conference in the just concluded annual IMF meeting, said instead of impeding FDI, the closure of the land borders was boosting local production and reducing unemployment which are fundamental to the growth of the country.
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The IMF research Chief, Oya Calesun while highlighting what Nigeria can do to boost its economy said, “Other areas are the need for tight monetary policy and simpler unified exchange rate system. Foreign exchange restrictions have also been distorting public and private sector decisions and holding back investments.”
The CBN governor, in his reactions to the comments made by Celasun said, “Two weeks to the closure of the border, I was called by rice millers, not less than five rice milers were complaining that each of them had nothing less than 30,000 metric tonnes of milled rice in their warehouses that they couldn’t sell as a result of smuggling. I was called by some of the poultry farmers that we were also financing through our intervention that they couldn’t sell their eggs and poultry items.
“A week after the border closure, the rice millers called back to say, governor thank you very much, we don’t know what happened, we don’t know if it was you that spoke to the President, with this border closure, have exhausted all our rice in our warehouses, people are coming to deposit money.”
However, according to the CBN governor, the restriction of foreign exchange to some items has created opportunities for investors to establish manufacturing firms for those items in Nigeria.
“I say that (IMF’s claim) is false. We are restricting access to forex for the importation of items that can be produced in Nigeria.
“If you are a Foreign Investor (FDI) that is interested in doing business in Nigeria, I will say instead of you facilitating the import of these items into Nigeria, we want you to come and produce it in Nigeria.”
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Mr Emefiele went further to say that Nigeria is a nation of almost 200 million people, and that investors going into production of any of the forex restricted items, would make profit and would be able to repatriate their earnings.
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I think it’s time we start listening more to our national agencies about what favours our economic interests. These international agencies are now looking more like the puppets of those who pay them well. Even a 100 level undergraduate can clearly understand that import restrictions will cause little discomfort to consumers in the short run, but competition coupled with a few other variables will definitely take care of the discomfort in the long run and boost economic growth, and consequently development. Continuous importation of goods with local substitutes is suicide for every economy. Thank God Nigeria has woken up to this.