Central Bank Governor Mr. Godwin Emefiele has said that Nigeria’s foreign exchange Reserves will continue to grow and that over the last 12 months it grew by over $10 billion from just over $23 billion in October 2016 to $33 billion in October 2017. He said “It is my belief that if we remain resolute with our efforts, policies and actions we can attain foreign exchange reserve position of about $40 billion by end 2018.”
He however warned the nation against being over confident of the current improved economic situation in the country saying that “though the current developments in macroeconomy are welcome, we as leaders and policymakers must neither become complacent nor over-confident. We must strive to improve and sustain the pace of recovery”.
Speaking at this year’s Bankers Committee dinner in Lagos Emefiele said “For one, our import bill may have fallen but our manufacturing and agriculture sectors still have a long way to go if we must attain self-sufficiency in those sectors. We must not be quick to discard the restrictive measures which aided our recovery simply because the metrics have improved. At the CBN we will continue to fine-tune our policies and strategies based on our understanding of evolving developments and supported by in- house technical analysis and simulations. We will remain proactive in ensuring that the welfare of Nigerians is optimised at any point in time.”
Continuing he said “In my personal understanding of current developments and my assessments of the traverse of future outcomes I expect that barring any unforeseen shocks, inflationary pressure will continue to ease. I believe that it may return to very low double digit or high single digit levels during the next year. Though the base effect had diminished, I expect that as the socio-economic factors that are driving food inflation are resolved the inertia therein would dissipate and the pace of headline disinflation will grow”.
He said that Economic Recovery will consolidate. According to him “as the sentiments improve in the macroeconomy and supported by proactive monetary, trade, industrial and fiscal policies, I expect a continued uptick in GDP growth with a positive spillover to improved unemployment rate. As policies to strengthen the agricultural and industrial sectors become more emergent, growth in these sectors will rise, further bolstering overall economy”. He said “As we entrench and sustain the transparency in the foreign exchange market, as foreign exchange reserves accretion continues, and market confidence and improved sentiments remain, I expect that the exchange rate will not only be stable but would begin to appreciate against major currencies. The adverse competitiveness outcome which such appreciation may entail would be adequately mitigated by proactive policies to ensure that our balance of payments position is not undermined”.
He said that Monetary policy stance could change when the underlying fundamentals become supportive. According to him “If the pace of disinflation becomes adequate and we see inflation at predicted levels, I am very optimistic that MPC may begin to see strong justification for an easing of monetary policy, which may further accelerate the recovery process. He further said “Finally, I expect a re-doubling of strong policy coordination, collaboration and cooperation which flourished during the very difficult times. To sustain our recovery the need is greater now than ever for a robust policy coordination between the key aspects of economic policymaking space. In Nigeria, this would include fiscal, monetary, exchange, and trade policies, which must be targeted at protecting farmers to boost agricultural outputs, support local companies and enhance manufacturing and industrial capacities, with a view to diversifying the economy away from oil and fossil fuels”.
Emefiele said “I am delighted that some of the pains that were associated with some of the CBN’s policies have become major gains in our economy. We have seen many manufacturers bounce back from near comatose to running shifts. We have seen many farmers smiling to the bank and going back to their farmlands in due seasons. We have seen some young Nigerians entering the rice-farming sphere rather than wait for “white-collar” jobs. And we have seen palm-oil corporations declare unprecedented profits because of the CBN’s policies. On these and other bases, I believe we can build the Nigeria of our dreams. I call on all of us, this evening, to set aside our complaints and differences and distractions, and let us work together to create this Nigeria, where balanced growth and shared prosperity is guaranteed for all”.
