- Says Anchor Borrowers Programme has Moderated FOREX Volatility
By Nse Anthony-Uko,
(Sundiata Post) — The Central Bank of Nigeria (CBN) has said it will continue to explore fine tune measures and guarantee a stable exchange rate regime and ensure that interest rate are supportive of domestic production needs.
Governor of the CBN, Mr. Godwin Emefiele, said this on Wednesday at the 24th Seminar for Finance Correspondents and Business Editors in Awka, Anambra State.
Emefiele said there was need to establish appropriate structures that support robust domestic production while imports are used to supplement shortfalls of inputs or final products.
He said, CBN recently introduced the flexible foreign exchange regime, with FOREX restrictions placed on the importation of 41 items.
This, he said, became inevitable in order to curtail fast depleting foreign reserves, occasioned by the significant demand for imports in Nigeria.
He said: “the bank has consistently supported the economy with robust supply of foreign exchange to deposit money banks (DMBs) particularly to meet demands for invisibles such as school fees, medical tourism and personal travelling allowance. This has led to stability in the Naira exchange rate against the US Dollar.
The governor also listed the successes of the ABP, saying it has boosted Nigeria’s non-oil exports.
“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 9 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.”
“The Bank will continually fine tune measures to ensure and guarantee a stable exchange rate regime. With on-going recovery in economic performance, I am hugely optimistic that improved outcomes will be recorded in our work towards taming inflation, bringing down interest rates and guaranteeing exchange rate stability.
“We are consistently devising ingenious approaches to solve our peculiar challenges and will continue to learn from the experiences of other countries, particularly developing nations.
“what is required at this point in our economic history is the understanding and support of the citizens. It is at this juncture that I enjoin you as participants in the fourth realm of the estate to objectively report on the CBN’s efforts towards aligning its monetary policy objectives with broader economic policy, in efforts to generate significant domestic industrial activities that support import-substitution industrialization.”
The apex bank Governor said the theme for the seminar: “Import Substitution and the Dynamics of Interest and Exchange Rates Management in Nigeria” was indeed topical, given recent collaborative efforts to stimulate real sector activities in Nigeria and bolster economic growth.
“This is quite significant for the Central Bank of Nigeria (CBN) in view of its various interventions, mainly to provide cheap financing for critical sectors and to enhance domestic production,” he said.
However, he called on the media to support the current efforts of government tilted towards self-sufficient and industralisation.
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