• Nigerian Economy Desperately Needs To Be Revamped — CBN

STAKEHOLDERS in the financial sector, particularly the foreign exchange, have critically examined the Central Bank of Nigeria’s (CBN) suspension of forex funding for 41 items, its impact on forex reserves and exchange rate stabilisation, as well as the overall implications for Nigeria’s trade policy and the economy.

At a recent forex dialogue organised by the Policy Development Facility Phase II (PDF II), a DfID programme, and the Nigerian Economic Summit Group (NESG), which held in Lagos, stakeholders took a closer look at CBN’s recent Forex policy with the aim of reviewing its short and long term effects on businesses.

The policy, which was, introduced on June 23, 2015, suspended foreign currency funding for about 41 imported items, which are considered a strain on Nigeria’s already dwindling foreign reserves. The policy, which was met with mixed feelings, affects various business sectors and SME products, ranging from vegetable oil to Palm Kernel, wooden fabrics, and toothpicks among other many items.

In his remark during the panel discussion sessions, which he chaired, MD/CEO, Financial Derivatives Company, Bismarck Rewane, surgically examined the state of the Nigerian economy. The panel, cut across various stakeholders with the CBN governor represented by the Director Monetary Policy Department, Moses Tule; Shola Fashademi from Africa Exchange Holdings Ltd (AFEX), Dr. Eniola Ajayi from Consumer Advocacy Foundation of Nigeria (CAFON), and Vincent Nwanyi a policy analyst from the Lagos Chambers of Commerce and Industry (LCCI).

Dr. Ajayi during her discussion of the policy stated that Nigeria is in a crisis and requires urgent attention, adding that the policy cannot be a permanent approach to the problem, but stressed that the CBN needs to sit down with other ministries and determine what the economic policy for the country will be in the short, medium, and long term.

The panelists and other stakeholders unanimously noted that the CBN did not communicate its objectives clearly when introducing the policy, a major reason for the backlash it is facing.

The DG of SMEDAN, Bature Umar Masari, stated that the policy will directly impact on job creation, and hope resolution reached after the dialogue gets to the president. “For Nigeria to grow and survive, we as a nation need business in Nigeria to grow and survive as well,” he said.

Representative of the Comptroller General of Customs, while decrying the huge loss of revenue the new policy has caused the Nigerian Customs statistically, revealed there has been a 70 percent drop in revenue generation by the Service since the policy introduction in June.

The CBN governor, while giving analysis of the state of the Nigerian economy, said it desperately needs to be revamped, adding that though the policy had already been introduced by the CBN, the apex bank is still open to dialogue. He likened the policy to the pains and pangs of childbirth.
“When you dialogue, you don’t have a fixed position; you have to listen to both sides. The Central Bank and government do recognise that the policy exclusion of 41 items from funding through Forex appears to be unpopular with the business community in Nigeria,” he said.

Dr. Titilola Akindeinde of the PDF II, in a closing remark, commended the stakeholders and noted that the policy, however emotive, could be counterproductive to the economic growth of the nation. She appealed to the CBN to listen to the voices of all stakeholders as it does the job of setting monetary policy for Nigeria.