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CBN committed to reducing Nigeria’s demand for forex – Emefiele

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…COVID-19 responsible for Nigeria’s huge debt – Finance Minister

THE Central Bank of Nigeria Governor (CBN), Godwin Emefiele, has said that the apex bank is focused on reducing Nigeria’s demand for foreign exchange as a means of growing the economy.

Emefiele said this on Thursday, April 21, 2022 on the sidelines of the spring meetings of the 2022 International Monetary Fund (IMF) currently holding in Washington DC, United States, and monitored by The ICIR.

The CBN chief, while acknowledging the roles of the IMF and World Bank in advising economies around the world, Nigeria inclusive, stressed that the nation would never adopt the free float of Nigeria’s currency. He maintained that developing economies had the liberty of adopting “homegrown solutions” to their economic problems.

He said, “The IMF and World Bank provide advice that we work with. But even at some of our private meetings, we realise that there are challenges, leading us to adopt homegrown solutions to address them. We cannot adopt what is being proposed; we cannot adopt a free float of our currency.”

Emefiele maintained that the CBN was more concerned about reducing the high demand for foreign exchange and admitted that based on advice from international bodies, the naira rate had been adjusted from N155 to N410, so the apex bank could not be accused of not adjusting the currency.

He listed the many ways the CBN had worked in reducing demand for dollars, which included the stoppage of forex for the importation of rice and maize, and support for the development of the Dangote refinery, which is expected would reduce demand for foreign exchange for imported petroleum products when it comes on stream.

“With the reduction of forex for rice or maize, demand will drop. As it drops, we can adjust the exchange rate. We will continue to engage the IMF and World Bank,” he explained.

IMF Spring meetings 2022
IMF Spring meetings 2022. Credit: CGTN America
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The IMF cut its forecast for global growth to 3.6 per cent this year, a steep falloff from 6.1 per cent last year, and from the 4.4 per cent growth it had expected for 2022 in January. It blamed this downgrade on the Russia-Ukraine war, which is globally feared would trigger a looming food crisis, hike in oil prices and the disruption of supply chains.

It expects the world economy to grow to 3.6 per cent next year, slightly lower than the 3.8 per cent it forecast in January.

The Secretary/General of the United Nations Conference on Trade and Development (UNCTAD), Rebeca Grynspan, stated that 107 nations were exposed to the economic impact of the war in Ukraine.

A breakdown of these statistics revealed that 41 economies in Africa, 38 in Asia and the Pacific, and 28 in Latin America and the Caribbean were vulnerable to, at least, one dimension of the food, energy and finance crisis. Grynspan urged financial institutions to provide the funds that vulnerable countries needed to cushion the blow.

Emefiele noted that though inflation went up to 18 per cent due to some COVID-19 associated shocks, it had gone down to about 16 per cent. He reiterated the Federal Government’s desire to support households and businesses that would help in accelerating output and delivery.

Speaking in the same vein alongside the CBN Governor, Nigeria’s Minister of Finance, Budget and Planning, Zainab Ahmed, said the Federal Government was equally concerned about the high level of inflation driven by the cost of food and energy.

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Ahmed reiterated that the government was working on how to provide support to the economy to reduce the high inflation rate.

On debt, the minister explained that the COVID-19 was responsible for the huge debt Nigeria has currently incurred. However, she maintained that the nation’s debt levels were manageable and reiterated that Nigeria only had a revenue problem. She added that the ministry of finance was working hard to increase the nation’s revenue.

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