Emefiele to Buhari: Mr. President, we must stop import dependency

Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has expressed worries over widespread import dependency, which has wiped out most of the nation’s production and manufacturing bases.

Emefiele, who spoke on Monday at the unveiling of eNaira in Abuja, said Nigerian jobs are being exported in the process.

He told President Muhammadu Buhari to stop the decline.

“Under your leadership, Mr. President, we must stop this decline for good! We must return to massive homemade production; we must get our people working again. We must create the economic environment for massive domestic production and significant non-oil exports,” Emefiele told Buhari.

The CBN boss said much of the debate has been on exchange rate.

His words: “Mr. President, as you make ground breaking reforms, there have been continuing debate on the true value of the Naira. Rather than worry today on the direction of the exchange rate, let us take a step back and analyse how we got here in the first place.

“Please recall that since the advent of the International Monetary Fund (IMF)-led Structural Adjustment Programme (SAP) in 1986, and the introduction of the Second Tier Foreign Exchange (SFEM) market, the Naira has been on a one-way free fall from parity to the US Dollar in 1984 to over N410/USD today.

“Some 35 years later, we have not been able to achieve the many promises and objectives of that programme.

“Instead, what we have seen is widespread import dependency, which has wiped out most of our production and manufacturing bases and exported all our jobs in the process.

“What has happened to the massive textile factories across our nation such that we import almost all cotton products when we are rich in cotton?

“What has happened to our vehicle assembly plants across the nation such that we import most vehicles and have become a massive dumping ground for dying second-hand vehicles?

“What has happened to our rubber plantations through which we made the best tyres and rubber products in the world? What has happened to our groundnut pyramids? What has happened to our Cocoa farms? What has happened to our palm oil mills?”

Emefiele stated that there is no cause for alarm on the nation’s foreign reserves.

According to him, “As custodians of your national reserves, let me first assure you that there is no cause for alarm. Our FX reserves are strong and indeed getting stronger by the day, crossing the $40 billion mark, and is one of the highest in Africa – and growing.

“But we cannot fritter our reserves away on cheap imports and currency speculators. We must return to an employment-led growth anchored on productivity and rewarding producers of local goods, services, innovation and new technologies.

”If you consume cheap imports and export our jobs, we will make you pay dearly; but if you produce locally – with little or no foreign inputs beyond machinery, we will support you, and the markets will reward you abundantly.”

Emefiele announced a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in the Development Finance Department under his direct supervision.

He explained that under this policy the CBN would advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.

The CBN Governor explained that eNaira is Nigeria’s CBDC and it is the digital equivalent of the physical Naira.

”As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira,” he said.

Emefiele added that the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and has implemented secure safeguards and policies to maintain the integrity of the financial system.

He pledged that there would be strict adherence to the anti-money laundering and combating the financing of terrorism (AML/CFT) standards in order to preserve the integrity and stability of Nigeria’s payment system.

According to Emefiele, since the eNaira platform went live, there has been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website.

”Thirty-three banks are fully integrated and live on the platform, 500 million has been successfully minted by the Bank, N200 million has been issued to financial institutions, over 2,000 customers have been onboarded and over 120 merchants have successfully registered on the eNaira platform.”

The CBN governor also used the occasion to commend President Buhari for making history, yet again, with the launch of the eNaira – the first in Africa and one of the earliest around the world.