The Nation Newspaper

Tag: Mr Godwin Emefiele

  • $40bn drained from external reserve in 10 years, says CBN

    $40bn drained from external reserve in 10 years, says CBN

    The Central Bank of Nigeria (CBN) has cried out that about $40 billion had been depleted from the nation’s external reserves in 10 years due to the taste for imported goods by Nigerians.

    To stem the hemorrhaging of the external reserve the CBN has strongly advocated for Nigerians to begin to process raw materials so as to get more value and earn more foreign exchange.

    According to the CBN governor Mr Godwin Emefiele, “exported raw materials such as crude, wood, cocoa amongst others whose end products are later imported, are being sold cheaply and bought back at more expensive rates” He said the level of the external reserve will be significantly beefed up if fuel which takes up 20 per cent of Nigeria’s import bill is locally produced.

    Defending the decision of the CBN to support the real sector, Emefiele said the apex bank “is convinced that the sector has sufficient employment capabilities, high growth potentials, contributes significantly in accretion to foreign reserves, expands the industrial base and diversify the growth potentials of the economy.”

    Emefiele noted that Nigerians “must, by now have been tired of hearing people talk about the potentials of Nigeria, now is the time to live that dream, we can achieve our goals and give Nigerians the chance to live longer, better and more fulfilled lives.”

    To make this possible, the CBN governor appealed “to Nigerians to patronize locally made products to encourage the manufacturers to remain in business, interventions by the bank are centered around agriculture, Micro, Small and Medium Enterprises (MSMEs) and Infrastructure intervention.”

    The CBN governor also disclosed that in order to make the real sector attractive to the banking industry, the apex bank has injected over N1.3 trillion into the sector.

    Speaking at the annual finance corespondent sand business editors seminar in Ibadan yesterday, the CBN Governor Mr Godwin Emefiele said the desire to revive and stimulate credit to the real sector was what informed the bank’s efforts to pump such huge amount of financial resources into the real sector.

    Represented by the by deputy governor, Corporate Services, Adebayo Adelabu Godwin Emefiele noted that by injecting funds and subsidizing rates, and through relevant policies, the CBN has assisted in growing the economy and promoting the growth of the different sectors of their economies.

    According to Emefiele, the interventions that culminated in the over N1.3 trillion support for the real sector include “the Agricultural Credit Guarantee Scheme Fund (ACGSF),the Commercial Agricultural Credit Scheme (CACS), the Agricultural Credit Support Scheme (ACSS), the N300 billion Real Sector Support Facility (RSSF), the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), the Small and Medium Enterprises Refinancing and Restructuring Facility (SMERRF), the N75 billion Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), the N213 billion Nigeria Electricity Market Stabilization Fund and only recently, the Anchor Borrowers’ Programme launched by President Muhammadu Buhari.”

    The CBN is also supporting the Nigeria Export Import Bank (NEXIM) with N50 billion export refinancing and restructuring facility as well as N500 billion as non-oil export stimulation facility. “If you add all these it is in excess of N1 trillion that have been deliberately injected into the system to ensure that they are fully resuscitated and they become attractive for commercial banks” Emefiele said.

    The CBN governor however stated that credit injection to the real sector was not intended “to crowd out the financial institutions in the space of credit delivery but to provide incentives that will stimulate lending at reasonable rates by banks to the real sector.” In addition, the reduction of the CRR of DMBs he noted “has freed almost all the resources that the banks can lend to finance projects under the real sector.”

    Reacting to recent criticisms that the CBN has gone beyond its mandate, the CBN Governor responded that “many central banks in emerging economies, in carrying out their primary mandate, go a step further in directly supporting different sectors of the economies of their respective countries.”

  • FG Moves Against Rice Waiver Beneficiaries

    FG Moves Against Rice Waiver Beneficiaries

    The federal government has vowed to go after importers who enjoyed waivers to import rice but went ahead to exceed the quota granted them.
    Speaking in Abuja yesterday at a stakeholders’ meeting with officials of Paddy Rice Producing states and Rice Value chain investors the Governor of Central Bank of Nigeria (CBN) Mr Godwin Emefiele they have resolved “to go after rice importers who defaulted in the payment of customs duty after bringing in excess quotas of the product into the country at concessionary rates.”
    The CBN he said would take the matter with President Muhammadu Buhari to ensure that the money is paid. According to Emefiele, “by exceeding their import quota, these rice importers have flooded the Nigerian market with rice that are sold below what is produced locally thus making consumers to ignore the locally produced ones.”
    Emefiele appealed to erring rice importers to “go and pay, you are taking a big risk and don’t wait for the big stick to be wielded on you. Just go and pay.” He assured the rice producers that the bank would work closely with the Nigerian Customs Service to address the issue of smuggling.
    Earlier Emefiele had disclosed that $2.41 billion was spent by Nigeria to import rice into the country between January 2012 and May this year. To this end, he foreclosed on any reversal of the ban on forex for importation of certain items stressing that “those who are nursing the thought that the bank’s decision on forex ban for importation of rice, fish and other items would be reversed should forget such as the bank has no plans to do so.”
    He lamented that the massive importation of rice “had resulted in huge unsold stock of paddy rice cultivated by our farmers and low operating capacities of many integrated rice mills in Nigeria.”
    To support local production of rice, Emefiele said the CBN in collaboration with the Federal Ministry of Agriculture and Rural Development have agreed to come up with a comprehensive financing model to support rice millers and other investors in the sector.
    The need to intervene in the sector with this funding and other packages Emefiele said “was borne from the fact that the country can never achieve its true potentials by importing everything it can produce locally.”
    To this end, the CBN he said would make funds available to rice farmers through some of its funding program such as the Commercial Agriculture Credit Scheme and the  N220 billion Micro Small and Medium Enterprises Development fund.
    This fund he said “would be made available to the rice farmers through the Microfinance Banks at an interest rate of nine percent” but he urged farmers to report to the CBN any Microfinance bank that charges interests above the stipulated rate.
    The CBN governor appeal to state governments “to provide lands for the farmers on a large scale and we will work with them to clear some of these impediments. “We are at a stage where we must feed our selves and all hands must be on deck to ensure this works.”
    Kebbi State Governor Alhaji Atiku Bagudu, who spoke on behalf of the ten major paddy rice producing states of Kebbi, Kaduna, Katsina, Jigawa, Sokoto, Ebonyi, Taraba, Zamfara, Nasarawa and Niger, assured that they would do everything possible to support the CBN intervention.
    Atiku Bagudu said rice producing states in Nigeria “have enough capacity to produce rice that would help the country attain self sufficiency as well as for export purpose.”
    Earlier, the rice millers had called on the government to address some of the bottlenecks affecting rice production in Nigeria. The areas they identified include bigger fields for rice production, funding, access to land, establishment of more rice mills in the country, increase in capacity of existing mills, Investment in research, irrigation facility, stable rice policy that would be agreed to by all stakeholders and the need to tackle issue of smuggling.
    [news_box style=”3″ display=”tag” tag=”Rice, FG, CBN” count=”7″ show_more=”on”]
  • Forex: CBN moves against importers of rice, cement

    Forex: CBN moves against importers of rice, cement

    The Central Bank of Nigeria (CBN) has said that importers of rice, cement and other products will no longer have access to Foreign Exchange from the CBN, Banks and Bureau De Change for such importation.

    The CBN Governor, Mr Godwin Emefiele, who disclosed this at a news conference on Wednesday in Abuja, said the measure would prevent further depletion of the country’s foreign reserve.

    He said the country was spending huge amount to import things that could be produced locally.

    Emefiele said the apex bank would not continue to support the importation of such items through the use of the hard earned foreign exchange.

    Some of the products include margarine, palm kernel, palm oil products, meat and processed meat products, vegetables, private airplanes and jets, Indian incense, tinned fish, galvanised steel sheet, roofing sheet and furniture.

    “Importers who may want to continue importing these goods would have to sort their foreign exchange from their own private sources.

    “The CBN will continue to be vigilant around this policy, keep reviewing the list of items as it becomes comfortable that these items can be produced locally if we apply ourselves sufficiently.

    “This policy change is in line with the believe that Nigeria cannot attain its true potentials by simply importing everything into the country.

    “We have to decide what we really want for our country and I believe that the time is now for that deep and honest conversation,’’ he said, adding that in spite of relative positive GDP growth over the past seven years, there was no corresponding reduction in unemployment and poverty.

    He said bank’s analyses of the situation had compelled it to put to a stop forex access to some of these goods to encourage local production and consumption for economic development.

    The CBN chief also said that the Federal Government was spending about N1.3 trillion on the average annually to import rice, fish, sugar and wheat.
    “Why should we continue importing rice into Nigeria when vast amount of paddy rice produced by local farmers across rice belts are being wasted and ignored.
    “What will it take for these importers to stop importation and go into processing this locally produced rice.

    “Why are they not utilising large expands of arable lands for cultivation instead of importing rice into the country,’’ he said.

    Emefiele said that Nigeria had been creating jobs for other countries, while importing rice into the country.

    He said it was unfortunate that sardines, tooth picks, among others, were imported into the country.

    Emefele said the apex bank had no power to ban the importation of the items, but noted that it would work hard to ensure support for local production.

    He said local production would reduce poverty, unemployment and pressure on the reserve. “I believe that the current situation we found ourselves affords us a unique opportunity to embrace self sufficiency in Nigeria.
    “We should also reduce our appetite for everything and anything foreign, conserve reserve and create jobs at home for our people.

    “With full complement of the bank management, we would continue to look for areas which the bank can play a catalytic financial role to achieve the goal in the near future,’’ he said.

    On lifting of ban on importation of textiles and furniture by the Nigeria Customs, he said CBN would not provide foreign exchange for people that would want to import such products.