CBN Gov, Emefiele, disagrees with Atiku’s Monetary Policy

• As Bank retains rates

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has pointed out that the proposed monetary policy of former Vice President Atiku Abubakar is flawed and will reverse the gains the country has made in encouraging local production and manufacturing.

Emefiele noted that Atiku’s suggestion that he bids to free-float the naira and open up the economy to imports of all sorts is a recipe for disaster.

It was noted that Nigeria under the Muhammadu Buhari administration has focused on preventing Nigeria from importation of foods and items that can be made locally; adding that billions of naira in loans have been extended to farmers and investors in agriculture.

Emefiele at the first Monetary Policy Committee (MPC), meeting of the year on Tuesday, stated: “The MPC reviewed it and concluded that it would be wrong. It is as good as saying that we should go back to the era of Structural Adjustment Programme (SAP) in Nigeria. The implication can better be imagined. It will certainly lead to capital flight, lead to massive depreciation or devaluation of the currency and ultimately to currency crisis in Nigeria and I think we should all know that it is a road to perdition to ever go in that direction.

“There is no capital control in Nigeria today because you cannot find the CBN trying to intervene in the market for demand and supply of foreign exchange.

“Normally, the Central Bank as an independent institution is apolitical but it is also important that at the MPC meeting today we asked ourselves if there is any merit in it to begin to say that we should look at free-floating the currency or that we should allow free import of goods that we have restricted. The MPC came to a conclusion that this was a wrong premise.

“We cannot be talking about allowing import of items that can be produced in the country today, exporting jobs from Nigeria to foreign countries, and we say we have the interest of Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say that you will allow imports to just flood the country just because you want to please anybody. It is not in our interest.

“We will remain apolitical. We will not want anybody to drag the central bank into issues that are within our remit otherwise, we would respond to it.”

The CBN governor maintained that the CBN would get even more aggressive to see to it that any or all food items that can be produced in Nigeria and consumed in Nigeria and are currently being imported into Nigeria may face forex restrictions, thus, giving reasons for Forex restrictions on imported items.

“We would go through our records and once we convince ourselves that these products can be produced in Nigeria, we will place them on the FX restriction list. It means that you cannot source foreign exchange from Nigeria foreign exchange market to import those items into Nigeria.

“If you have free dollars, you can bring it in but you will not be able to even make payments for those goods with dollars from the Nigerian foreign exchange market. This is because we think that the initiatives that CBN has put in place in the past to cut imports and diversify the structure of the Nigerian economy is yielding results and we will continue to be that aggressive. And we also went further to say that the Economic Intelligence Department of the CBN together with EFCC would investigate any company, any individual suspected of bringing these items through smuggling or any means for money laundering and economic sabotage,” Emefiele said.

Atiku had indicated that he would open up the country to imports.