FX challenges beyond monetary policy interventions — Emefiele

Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele says monetary policy interventions alone cannot totally address the lingering foreign exchange scarcity challenges currently hurting various businesses, especially in the manufacturing sector.

Emefiele disclosed this in a keynote to the maiden bi-annual Non-Oil Export Summit held in Lagos on Thursday.

According to him, the CBN has been working to manage both the demand and supply side to meet foreign exchange obligations to the best of its ability.

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Attributing the current challenges of the Nigerian economy to a combination of local and global factors such as the COVID-19 pandemic, delays in global logistic value chains, and local security challenges, he expressed concern that most of Nigeria’s current sources of foreign exchange inflows were unreliable and were prone to fluctuations of global economic developments.

Emefiele noted that the global economic challenges had impacted food production among others and had exerted undue pressure on the economy, thereby exposing the Nigerian economy and making macroeconomic management very difficult.

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While stressing the need for a more diversified economy, the Governor said Monetary Policy alone could not bear all the burden of the expected adjustments needed to manage the challenges to the Nigerian economy.

“These problems call for urgent design and steadfast implementation of other supportive, structural, and complementary policies that are broad-based, coordinated, and focused on complementing the work of the monetary authority,” he noted.

Reiterating the need for a more diversified economy,  Emefiele said Nigeria could be great without crude oil, the global price of which the country had no control over. He, therefore, urged all stakeholders to regroup by working together to reposition Nigeria on a growth trajectory by taking diversification of the economy much more seriously.

He also emphasised that Nigeria had very little choice left but to look inwards and find innovative solutions to its challenges.

In order to avoid sudden adjustments to Nigeria’s economic life, he said there was a need to focus on strategies that can help the country earn more stable and sustainable inflows of foreign exchange.

“We would need to follow the best practices of other countries and ensure that we protect ourselves a little bit from factors that are beyond our immediate control. This is the time to start working in synergy for the good of our nation. This is the time for us as a Banking Community to do more and support exporters who have been flying the flag of Nigeria in the international market space,” Emefiele declared.