The Central Bank of Nigeria (CBN) has called on banks and Development Finance Institutions (DFIs) to join hands with the CBN as well as the ministries of Agriculture, Industry, Trade and Investment and other MDAs to encourage local industries improve the cost and quality of their output so as to be more competitive.
Godwin Emefiele, CBN governor, who made the call also said the apex bank is already collaborating with the Ministry of Industry, Trade, and Investment; the Ministry of Agriculture and Rural Development, as well as the Directorate of the National Youth Service Corps (NYSC) to aggressively begin the first phase of a Strategic Import Substitution Programme that will take advantage of declining oil prices.
“This strategy has become necessary in light of the fact that records show that as of the beginning of the Jonathan administration in 2011, the country was spending about N1.3 trillion importing four products, namely, rice, sugar, wheat, and fish. It beats my imagination to understand why on earth we cannot produce these items here at home”, Emefiele said over the weekend at the 48th annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos.
Reeling out the benefits of the decision taken by the Monetary Policy Committee (MPC) recently, the CBN governor said the decision to tighten monetary policy was calculated to moderate the expected inflationary pressures that may result from exchange rate passed through to domestic prices, and ensure that inflation expectations are well anchored.
According to him, the decision to raise the Monetary Policy Rate (MPR) is expected to increase capital inflows into the country, which should improve accretion to reserves.
The increase in Cash Reserve Requirement (CRR) will reduce the amount of excess liquidity available for speculative and arbitrage activities and moderate the pressure on the foreign exchange market, he said.
