Emefiele defends central bank’s interventionist approach

The state of the Nigerian economy requires the Central Bank of Nigeria (CBN) to intervene in sectors that can stem unbridled imports.

The Governor of the apex bank, Godwin Emefiele, who disclosed this yesterday, while declaring open the 32nd seminar for Finance Correspondents and Business Editors in Akure, Ondo State, insisted that the CBN interventions are meant to stabilise the economy.

An Economist, Dr Tope Fasua, in his presentation, gave a glimpse of the possible reasons governments are cautious with the adoption of cryptocurrency.

Fasua argued that the ability to escape taxation might lead to the collapse of the government’s ability to generate taxes on financial transactions to sustain the global economy.

Emefiele explained: ‘’Being a developing economy, our approach to monetary policy must incorporate context and we do this by innovating around the use of available instruments. We understand that monetary policy must coordinate well with fiscal policy towards addressing the numerous developmental challenges our nation faces. Fortunately, the enabling statute envisages this and empowers us to intervene where and when necessary under my watch, the CBN has done this through various developmental finance initiatives.’’

The CBN Governor, who was represented by the Deputy Governor, Corporate Services, Edward Adamu, said that to solve the immediate and long term economic challenges facing the country, the apex bank embarked on creating enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development.

He explained that to contain inflation and cushion the impact of the drop in the supply of foreign exchange in the economy, not only did the CBN tighten the monetary policy stance, it also introduced demand management approaches to conserve reserves and support the domestic production of certain goods’’.

Speaking on the theme, ‘Exchange Rate Management and Economic Diversification in Nigeria – The ‘’PAVE’’ Option’, Emefiele said that the bank encourages manufacturers to consider local options in sourcing for raw materials by restricting access to foreign exchange on some items, adding that four of the items alone at the time constituted over N1 trillion of the country’s annual import bills.

For the Produce Add Value and Export [PAVE], the CBN boss noted, ‘’This is expected to make Nigerians consume what they produce, add value to it and even export the surplus, it is an initiative akin to South-East Asia’s much referenced export-led industrialization policy which changed the economic fortunes of countries such as South Korea, Taiwan, Malaysia and Singapore’’