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Group defends Emefiele over falling exchange rate of naira

By Jesutomi Akomolafe
11 April 2022   |   2:53 am
The Nigeria Patriotic Quest (NPQ), a group of professionals based in the diaspora but rooting for the governor of the Central Bank of Nigeria (CBN), Godwin Ifeanyichukwu Emefiele, to join the presidential race

Central Bank of Nigeria. Photo/facebook/cenbankng

The Nigeria Patriotic Quest (NPQ), a group of professionals based in the diaspora but rooting for the governor of the Central Bank of Nigeria (CBN), Godwin Ifeanyichukwu Emefiele, to join the presidential race in 2023, yesterday, absolved the CBN boss from the decline of the naira in recent years.

In a statement by the coordinator of NPQ, Ahmed Ja’Usman Tijani, it said rather than heap all the blame for the current state of the naira on Emefiele, the major factors that negatively impacted the naira were outside the direct purview or supervision of the apex bank.

“Some of which are: The persistent and drastic drop in the price of crude oil starting from 2015 up till the end of 2020. Nigeria as a mono-product export economy was dealt a heavy blow by this decline in the price of crude oil. Some of us may recall that by end of March 2020, Nigeria’s Brent crude was averaging $25 per barrel with Bonny Light even doing worse at $21 per barrel. This situation affected the inflow of dollars into the economy and, as can be expected, led to the drop in the value of the naira. To put this in stark relief, the nation’s foreign reserves plunged from a high of $47 billion in 2012 to about $33 billion dollars in 2020.

“The COVID-19 pandemic also dealt a heavy blow on the economy, as a result of the lockdown of most areas of national life and the resultant negative impact on productivity and employment.

“Another major factor is the nation’s very poor industrial and productive base. We are an import-dependent economy, as we import most of our major consumer and industrial goods. This resulted in a very high demand for dollars in the face of ever-dwindling forex inflows.

“In 2021, when the price of crude oil began to recover appreciably, one would have thought that it was time to shout ‘uhuru’. However, this was not the case, as we were not in a position to benefit from the high prices, as a result of our low oil production capacity.

We have consistently been unable to meet up with our OPEC production quota of 1.8 million barrels per day, due to persistent vandalisation of oil pipelines and facilities.

“Coupled with this is the blatant stealing of sometimes over 60 per cent of crude production. This has meant that our production have hovered around 1.3 million barrels per day, unlike in the past when Nigeria had the capacity to produce up to two million or more barrels of oil per day. The naira definitely cannot fare better given such dire circumstances.”

The group noted that the solutions to these problems, though obvious, have proved intractable over the years.

“Some of the apparent solutions are Deployment of top-notch technology-driven security measures to stop the vandalisation of oil production facilities and theft of crude oil, implementation of policies to enhance local production of most consumer goods, including motor vehicles, resolving the crises affecting electricity, security and transport infrastructure, which will help in boosting productivity across agriculture, manufacturing and other economic sectors.”

The group added that despite the challenges, Emefiele has gone out of his way in search of solutions to the numerous problems facing the economy, with intervention programmes cutting across agriculture, industries, energy and infrastructure. 

The group added: “The way and manner Emefiele has managed to combine the traditional duties of the CBN with interventions in the major sectors of the economy are the reasons for our unflinching support for him to contest the presidency of Nigeria in 2023.”