The Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, says the use of trade protection as a monetary policy tool is good for resolving negative perceptions about any country.
Emefiele, represented by Mr Moses Tule, Director, Monetary Policy Department of CBN, said this in a keynote address at the ongoing seminar for finance correspondents and business editors in Lokoja on Wednesday.
The theme of the seminar is: “Monetary Policy Implementation Amidst Global Economic Protection.”
He said embracing protectionism was important considering its implications and challenges it posed to the effective monetary policy implementation.
Trade protectionism is an economic policy of restricting imports from other countries through methods such as tariffs on imported goods.
It is also designed to discourage imports and prevent the foreign dominance of local markets.
Protectionism directly contrasts with the system of free trade in which the trading in goods and services between or within countries flows unobstructed by trade restrictions.
Emefiele said Nigeria with its insatiable taste for foreign goods had embraced the concept to protect its domestic economy.
According to him, Nigeria in the past had opened its borders to indiscriminate importation of goods and services.
This, he said, prompted the CBN to introduce the restriction of official foreign exchange on 41 items.
The CBN governor said it was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves.
He said other policies introduced included contracting Gross Domestic Product (GDP) as a result of recession and an embarrassing rise in the level of unemployment confronting the economy.
“The implementation of the 41 items, in addition to the other complementary macroeconomic policies, no doubt, was effective in lifting the Nigerian economy out of recession.
“For example, the real Gross Domestic Product (GDP) grew by 1.40 per cent in the third quarter of 2017 up from 0.72 per cent and also the contraction of 0.91 per cent in the second and first quarter of 2017.
“There has been improved reserve accretion to the country’s reserve,” the CBN governor said.
Emefiele also said pragmatic economic nationalism, therefore, would ordinarily vote in favour of protecting the domestic economy.
This, he added, would be “as long as it does not infringe upon the tenets of beggar-thy-neighbour policies”.