*Defends Nigeria’s Exchange Rate Policy
*His Economic Genius
*His Matchless Exploits In Fiscal Governance, Commerce
Many an economist has been seen to wallow and drown in the pale poetry of financial jargons. Not Godwin Emefiele!
The Governor, Central Bank of Nigeria (CBN) coasts on the fluid poetry of the policies he espouses; like a practiced surfboarder, he cruises atop storms, riding tempests and tides of commerce into pliant waves.
Some have likened him to an economic idol, spinning stirring narratives of his efficient leadership. Many more attest earnestly, in real time, to the effectiveness and depth of his interventions.
Interestingly, however, Emefiele has expressed his delight at the commendations poured on Nigeria in her efforts to drive non-oil exports, even as he foreclosed the possibility of adopting a clean float foreign exchange management approach as long as the supply shock remains.
Speaking during an interview with journalists on the sidelines of the IMF/World Bank Spring Meetings in Washington DC, United States of America, Emefiele said, “I am happy that the IMF and World Bank are seeing efforts to drive non-oil exports. Before now, we have always relied on earnings from crude oil
as well as foreign portfolio investments and
foreign direct investments.
“We will continue to look at how to improve non-oil
exports, particularly through export proceeds and
so on. I am happy that other people outside Nigeria
are seeing these efforts and this means we will
continue to do more to ensure that we really
deepen this and fund imports with proceeds from
exports and with less reliance on the central bank,” an upbeat Emefiele said.
However, he maintained that CBN would rather continue with a managed float approach to foreign exchange market, insisting that Nigeria could not bear the repercussion of floating the naira completely, as Nigeria cannot afford to abandon the local currency to the vagaries of market forces.
Emefiele promised to continue to engage relevant stakeholders, including the International Monetary Fund (IMF) and the World Bank on best approaches to stabilising the market.
This assurance has become imperative as the Bretton Woods institutions intensified pressure on the country to embark on sweeping foreign exchange reforms, including adopting a market-led management approach.
“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself. When you allow that to happen, you will have an uncontrollable spiral on the naira. But what managed float means is that we have some measures in place to help control the spiral,” the governor said.
Emefiele said the managed float, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand. He said the CBN wants to ensure that the production of excluded items is deepened before the current policy, which “they do not like” is reversed.
Emefiele appreciated the support of the IMF, especially through special drawing rights (SDR) and advisory but insisted the CBN would lean heavily on “homegrown” solutions as advised by the Fund during its meetings with national economic managers and central banks.
He said: “Our resolutions at the IMF have always suggested that governors should go back to their countries and think of homegrown solutions. Nigeria’s situation is very peculiar, and that is the reason we have always called on the IMF to show understanding. It has, indeed, shown understanding.
“The IMF and World Bank provide advice that we work with. But even at some of our private meetings, we realise that there are challenges, leading us to adopt homegrown solutions to address them. We cannot adopt what is being proposed; we cannot adopt a free float of our currency. With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate. We will continue to engage the IMF and World Bank.”
Emefiele said Nigeria would surpass the IMF growth projection for Nigeria. In its recent World Economic Outlook, the Fund raised the country’s prospect by 0.7 percentage points to 3.4 per cent on the account of the bullish oil market.
*Defends Nigeria’s Exchange Rate Policy
*His Economic Genius
*How He Diversified the Nigerian Economy
*His Matchless Exploits In Fiscal Governance, Commerce
Many an economist has been seen to wallow and drown in the pale poetry of financial jargons. Not Godwin Emefiele!
The Governor, Central Bank of Nigeria (CBN) coasts on the fluid poetry of the policies he espouses; like a practiced surfboarder, he cruises atop storms, riding tempests and tides of commerce into pliant waves.
Some have likened him to an economic idol, spinning stirring narratives of his efficient leadership. Many more attest earnestly, in real time, to the effectiveness and depth of his interventions.
Interestingly, however, Emefiele has expressed his delight at the commendations poured on Nigeria in her efforts to drive non-oil exports, even as he foreclosed the possibility of adopting a clean float foreign exchange management approach as long as the supply shock remains.
Speaking during an interview with journalists on the sidelines of the IMF/World Bank Spring Meetings in Washington DC, United States of America, Emefiele said, “I am happy that the IMF and World Bank are seeing efforts to drive non-oil exports. Before now, we have always relied on earnings from crude oil
as well as foreign portfolio investments and
foreign direct investments.
“We will continue to look at how to improve non-oil
exports, particularly through export proceeds and
so on. I am happy that other people outside Nigeria
are seeing these efforts and this means we will
continue to do more to ensure that we really
deepen this and fund imports with proceeds from
exports and with less reliance on the central bank,” an upbeat Emefiele said.
However, he maintained that CBN would rather continue with a managed float approach to foreign exchange market, insisting that Nigeria could not bear the repercussion of floating the naira completely, as Nigeria cannot afford to abandon the local currency to the vagaries of market forces.
Emefiele promised to continue to engage relevant stakeholders, including the International Monetary Fund (IMF) and the World Bank on best approaches to stabilising the market.
This assurance has become imperative as the Bretton Woods institutions intensified pressure on the country to embark on sweeping foreign exchange reforms, including adopting a market-led management approach.
“They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself. When you allow that to happen, you will have an uncontrollable spiral on the naira. But what managed float means is that we have some measures in place to help control the spiral,” the governor said.
Emefiele said the managed float, which allows the CBN to intervene in the market when there is a supply shock, would be in place as long as supply exceeds demand. He said the CBN wants to ensure that the production of excluded items is deepened before the current policy, which “they do not like” is reversed.
Emefiele appreciated the support of the IMF, especially through special drawing rights (SDR) and advisory but insisted the CBN would lean heavily on “homegrown” solutions as advised by the Fund during its meetings with national economic managers and central banks.
He said: “Our resolutions at the IMF have always suggested that governors should go back to their countries and think of homegrown solutions. Nigeria’s situation is very peculiar, and that is the reason we have always called on the IMF to show understanding. It has, indeed, shown understanding.
“The IMF and World Bank provide advice that we work with. But even at some of our private meetings, we realise that there are challenges, leading us to adopt homegrown solutions to address them. We cannot adopt what is being proposed; we cannot adopt a free float of our currency. With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate. We will continue to engage the IMF and World Bank.”
Emefiele said Nigeria would surpass the IMF growth projection for Nigeria. In its recent World Economic Outlook, the Fund raised the country’s prospect by 0.7 percentage points to 3.4 per cent on the account of the bullish oil market.
