CBN Pledges Sustained Intervention In Boosting Nation’s Economic Growth

CBN Pledges Sustained Intervention In Boosting Nation’s Economic Growth
September 13 17:19 2017 Print This Article

By Yahaya Musa

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has pledged the Bank’s ssustained  intervention in the real sector of the economy in order to boost economic growth.

The CBN Governor who made this pledge, on Wednesday, in Awka, at a seminar organized for Finance Correspondents and Business Editors disclosed that the intervention will come in the form of the provision of cheap financing that will enhance domestic production and create jobs.

Speaking in line with the theme of the seminar: “Import Substitution and the Dynamics of Interest and Exchange Rates Management in Nigeria”, Mr. Emefiele explained that recent events have shown that widespread and high level dependence on importation to meet domestic consumption needs is not sustainable.

The Apex Bank boss who was represented by Acting Director, Corporate Communications, Mr. Isaac Okoroafor said that while “strategies to increase domestic production, especially of basic commodities, are necessarily accompanied by industrialization” there was “need to establish appropriate structures that support robust domestic production while imports are used to supplement shortfalls of inputs or final products.”

While the imperative of cross-national exchange of goods and services may not be disputed, he argued that it is also important that an economy does not lose itself to the vagaries of international trade admitting that the administrative measures to reduce imports may not be compatible with current trends in economic management that lean towards free markets.

He said: “These may not be completely dismissed, I would like to note that fundamentals of the domestic environment need to be promoted to support domestic production and invariably curtail imports. The CBN recognizes these challenges in its role provide economic advice and support the Federal Government’s aspirations economic growth and development. Within the core remit of formulating and implementing monetary policy, the interest and exchange rates serve as major instruments for CBN’s support for import substitution.”

The CBN helmsman further explained that its interventions in the FX market and the retention of interest rate and the Anchor Borrowers Programme (ABP) has added fillip to its effort to support a robust domestic local production.

“Indeed, the CBN has embarked on massive monetary stimulus through direct interventions in sectors that hold immense benefits for the broader economy. Such interventions have been in agriculture, micro, medium and small scale enterprises (MSMEs), power sector, aviation and youth entrepreneurship, among others.

“Furthermore, the Anchor Borrowers’ Programme (ABP) was established to boost local production of rice, wheat and other agricultural products.  It serves to create economic linkage between smallholder farmers and reputable largescale processors, with a view to increasing agricultural output and significantly improving capacity utilization of processors. The ABP was initiated as a policy option to create an ecosystem that connects smallholder farmers to big processors, thereby creating increased income for the farmer, jobs for the unemployed, and steady input supply for agro-businesses. I am happy to note that the scheme has already boosted agricultural production and non-oil exports in the face of unpredictable crude oil prices and its resultant effect on the revenue profile of Nigeria. These have also helped to moderate volatility in the foreign exchange rate from anticipated decreases to demand for FOREX from increased domestic production of such hitherto imported commodities,” he further explained.

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