The Governor of the Central bank of Nigeria, Godwin Emefiele has said that the Apex Bank will consider the advice of the International Monetary Fund (IMF) to review the exchange rate policies once Nigeria improves on her local production of goods and services.
Emefiele stated this at the sideline of the hybrid 2022 Spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington DC, United States on Thursday, 21st April 2022.
He acknowledged the commendations received from IMF over the positive momentum in Nigeria’s non-oil sector, when he stated that, “I am happy that the IMF and World Bank are seeing efforts to drive non-oil exports. Before now, we have always relied on earnings from crude oil as well as foreign portfolio investments and foreign direct investments”.
“We will continue to look at how to improve non-oil exports, particularly through export proceeds and so on. I am happy that other people outside Nigeria are seeing these efforts and this means we will continue to do more to ensure that we really deepen this and fund imports with proceeds from exports and with less reliance on the central bank.”
However, Emefiele emphasized the fact that countries in the world face various challenges and they must find a way to address these challenges. The CBN stated that it will continue to relate the peculiar situations challenging the Nigerian economy to the IMF and World Bank and how it wishes to tackle them for the progress of the economy.
He pointed out that the CBN had been putting in place certain measures to ensure that the exchange rate is stable. However, the apex bank admitted to the fact that more had to still be done in terms of interventions put in place to control the exchange rate.
Emefiele noted that, as long as demand for foreign exchange exceeds supply, we will continue to have exchange rate fluctuation challenges. Thus, he said that, “We are doing everything possible to restructure the base of the economy through some of the policies that we have put in place to deepen the production of goods in Nigeria.”
He also maintained that the exchange rate has devalued from about N165/$1 to N420/$1 on the official market between 2014 and 2021.
The Central Bank in a bid to set the economy back on its feet after the Covid-19 pandemic, decided to devalue the naira amongst other restrictive policies by the CBN.
This has been intensified by the country’s dependence on mono foreign earnings, continuous borrowings, declining foreign investment inflows, rising capital flight, overreliance on ways and means advances, expanded money supply, general uncertainty, among others.
The local currency has faced intense pressure since the Central Bank of Nigeria (CBN) adopted the investors and exporters (I&E) Window as the default official exchange rate.