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Helping the CBN to help the economy

AS  Nigerians across different cities of the country eagerly look up to the APC-led federal government of President Muhammad Buhari to revamp the country’s economy and stimulate growth, there is no doubt that the government would require more time if we will tell ourselves the honest truth. But more importantly, a number of efforts would also have to be put in place in bringing about the much-needed turn-aroundwe all hope to see in the dwindling economy.

But the current state of the economy is not helped by the fact that oil prices crumbled and forex inflow went south as a result. Indeed, while monthly forex inflow into the country hovers around $1 billion, the monthly forex demand by Nigerians and businesses in the country, according to figures from the Central Bank of Nigeria (CBN), is around $3.6 bn. This puts enormous pressure on Nigeria’s foreign reserves, which have depleted by 25% in the last 18 months.

Of course, the gravity of the situation we have in our hands is illustrated by the fact that we risk complete depletion and total disappearance of the country’s Forex reserves if things are not well-managed. That we have for long been an import-dependent country only made the situation further complicated. Here in lies the sense in the CBN’s decision to stop forex supply for the importation of some items, 41 of them,  which it believes can be locally produced by Nigerian companies. Some of these items include soap and cosmetics, rice, Indian incense and toothpicks, tomatoes/tomato pastes, wheelbarrows, head pans, and roofing sheets, among others.

Although the apex bank did not create the present Forex challenge since the factors driving the crunch are outside of the it remit and control, however, it has, in line with its statutory responsibilities, been battling to stabilise the Naira and Nigeria’s foreign reserves. It is a difficult battle and there are no easy or painless ways out.  Like some other public analysts have said, this really is not the best of time to be a CBN Governor. And that is why I seriously pity the Governor, Godwin Emefiele. If you ask me, I think he is a very strong man to have absolved some of the insults that have been hauled at him by angry Nigerians.

But quite frankly, some of the measures put in place by CBN have also come at some costs to some stakeholders, a number of whom have complained that their business operations are being hurt. But I believe doing nothing couldn’t have been an option. At the same time, some of the alternative policy options being prescribed by critics of the bank, such as devaluation, are not cost-free and do not necessarily address what is essentially a supply problem.

Meanwhile, for those who may not understand, the CBN couldn’t have waited until the cabinet was sworn in last October by President Buhari before doing what it ought to do in the best interest of the country. The apex bank, with the statutory responsibility of managing the key rates – forex, inflation, and interest – had to act fast especially in the absence of fiscal policy support to address the imbalance in the country’s international trade. And this was even aside its efforts at providing forex to Nigerian manufacturers who need to import machinery and intermediate goods to remain in business. This was basically to encourage “Made-in-Nigeria” products and services, a campaign which is already catching on well among the populace and gaining traction.

However, despite the CBN’s seeming good intentions to revamp the economy, I doubt if this can achieve the desired result for the economy if not complemented by other initiatives. Frankly, I think what we currently have on our hands can be likened to the case of a student who has an examination to write before he graduates but chooses to focus all his attention and energies on one particular course only while neglecting the others. Even if he scores an ‘A’ in it, he will still most likely come out a failure since he had a poor preparation for the other courses. That is why I think we are not realistic if we assume that it is only the CBN governor, Godwin Emefiele and his team who will successfully fix the challenges confronting our economy. That would be wishful thinking. It’s a dream that will not come true. That is the truth.  I’m not a pessimist. I’m only being realistic.

We all need to help the CBN help the  economy. This is because all that needs to be done are clearly beyond the scope of the mandate of the apex bank. If we will be realistic, ministries, departments and other agencies of government also have critical roles to play. And one of these roles, for me, is using tariffs to discourage the importation of foreign products Nigerian businesses can produce at home. This must be done to protect our local manufacturing industries. And this is where the Ministry of Finance comes in. As a matter of urgency, I think the Finance Minister, Kemi Adeosun, must put in place proactive fiscal policies that will go a long way in encouraging the local industry and discouraging importation through the appropriate tariffs.

Another is the need to enforce industrial policies that will help complement the CBN’s efforts; and this is where the Ministry of Trade and Investment also comes in. Even the Ministry of Power, Work and Housing, under the leadership Mr.Babatunde Fashola, must work tirelessly to improve power, expand road and other critical infrastructure in the country towards boosting local productivity and helping Nigerian industries to grow. This would be a major step forward for Nigeria. Moreover, the billions of naira Nigerian companies and private businesses spend on diesel and running their generators are funds which could have been put into better use. If these are sorted out, Nigerian companies would be able to compete at a higher level with their foreign counterparts. But when imported goods appear to be cheaper than local-manufactured products, we’re not helping our case but only worsening the situation.

Also helpful to Nigeria’s economy is the need for the Customs Service to tighten the country’s porous borders so that banned goods are no longer smuggled into the country thereby defeating the Buy-Made-in-Nigeria campaign and losing the gains being made on the monetary side. The reforms being carried out by Col. Hammed Ali (rtd), Comptroller-General of Customs, need to be stepped up. Such types of good works are needed so that the Customs can perform its job more effectively at our borders.

Overall, the federal government must urgently roll out incentives to encourage local manufacturing, not just for Nigerian companies but even foreign investors who want to set up their factories and production plants in the country. This would boost local manufacturing and so must not be delayed. As a country, this is also the right time for us to engage ourselves in serious introspection and take concrete steps at finally diversifying Nigeria’s economy through agriculture, manufacturing, tourism, and entertainment among others. We have mouthed this for too long. Now is the time to take action. Further procrastination would spell doom for us.

However, doing these do not in any way mean, as Nigerians, we ourselves don’t have some roles to play. As citizens, I frankly think we need to curb our appetite for everything foreign and wean ourselves of imported products, whatever they are. A situation where the average import bill of the country skyrocketed from N148.3 billion in 2005 to N917.6 billion in 2015, a whopping increase of over 500 per cent, all within just 10 years going by available statistics from the CBN, cannot be allowed to continue because this can’t help us.

As patriotic Nigerians, we must look inwards and encourage our own local manufacturing industry.

I believe we are very creative in this country. We are also highly-talented. These are facts that cannot be disputed. That’s why I’m confident there is nothing we cannot achieve if we put our minds to it. We must buy Nigeria. We must patronise Nigeria. We must support our own. No matter what it costs, we must do all we can to get Nigeria’s economy on a sound and sure footing again.

Finally, as it is with football or politics, I believe so it is with the economy. To achieve success, team work is required. To revamp and stimulate Nigeria’s economy, there must be collaborative efforts. Of a fact, a tree cannot make a forest no matter how big it is. So, like I earlier stated, this is not a job for the CBN alone. This is a job for all. And I think the old saying also applies here – United, we stand; divided, we fall. That’s why we must all work together, the government, ministries, departments, agencies, as well as every one of us as Nigerians, in actualising the change we all want to see in our country and making Nigeria great again.

Mr.Ismail Sirajo, an agricultural expert, wrote from Lagos.






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