CBN blames falling Naira on Nigerians’ import dependency

The Central Bank of Nigeria (CBN) stated that Nigerians’ import dependency is the cause of the falling Naira. The apex bank urges Nigerians to adopt homemade products to boost Nigeria’s economy and stop the Naira from depreciating further in the parallel market.

This was disclosed by Mr Osita Nwanisiobi, CBN Director of Corporate Communications, who was represented by Mr Sam Okogbue, Deputy Director, Corporate Communications Department at the opening session of a two-day expo organized by the apex bank in Owerri, Imo State on Wednesday.

He said, during the COVID-19 pandemic, the CBN’s Anchor Borrower’s program was the nation’s saving grace for improved rice availability. The actions, he added, were aimed at emancipating enterprises and eliminating poverty.

What the CBN is saying

Nwanisiobi, who spoke on the topic of “Promoting Financial Stability and Economic Development,” said the CBN had implemented interventions in the agricultural, manufacturing, and other sectors.

He claimed that Nigeria’s over-dependence on imports was one of the reasons for the currency’s depreciation.

“No successful economy thrives on the promotion of imported products over the exportation of locally manufactured products,” he said.

He added, “During the COVID-19 pandemic, rice was the most single popular component of our palliatives. This is a result of the CBN’s Anchor Borrower’s programme for rice farmers.”

Mrs Uchenna Onyene of the CBN’s Currency Operations Department spoke at the event, urging Nigerians to use the naira with caution, citing Section 21, Sub-section 4 of the CBN Act 2007.

She also urged Nigerians to adopt the CBN’s cashless strategy to decrease risk and improve transaction seamlessness, noting that the bank was dedicated to ensuring payment innovation for a better customer experience.

What you should know

• Nigeria’s capital inflows plummeted to a four-year low of $9.66 billion in 2020, only to drop further to $6.7 billion in 2021.
• International trade remained a major concern as Nigeria progressed with historical trade depict. Nigeria’s international trade balance for 2021 has dropped to a deficit of N1.94 trillion, the largest on record.
• Nigeria continues to be affected by the repercussions. Nigeria’s exports climbed by 51% to N18.91 trillion in 2021, up from N12.52 trillion the year before. The increase in export profits, however, was not enough to offset the 64.1% increase in import bills, which totalled N20.84 trillion.
• As a result of the FX Outflows, a $5.26 billion negative balance of payment was made in 2021, putting even more pressure on the local currency and necessitating the use of the external reserve.
• In 2021, the CBN reported that it has so far disbursed the sum of N864 billion to 4.1 million farmers cultivating 5.02 million hectares of land under its Anchor Borrowers’ Programme (ABP).