The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele on Monday said the apex bank and the Nigeria Export-Import Bank (NEXIM), will provide N500 billion for local manufacturers, to boost non-oil exports.
Emefiele represented by CBN Deputy Governor (Corporate Services), Edward Adamu, made this known at a workshop for financial reporters in Uyo, the Akwa Ibom State.
He said the CBN would continue to take major steps to support the economy and the real sector.
Speaking on the theme: “Sustaining economic growth beyond recession”, Emefiele said it was key to remember how the economy got into a recession in the first instance.
He explained that Nigeria entered recession because of the fall in oil prices from an average of about $110 per barrel to $28 per barrel; normalisation of monetary policy by the United States Federal Reserve System, which led to the stoppage of an injection of about $85 billion per month into the global economy; and geopolitical tensions among critical trading routes and partners around the world.
This, he said, led to a slowdown in economic growth, culminating in five consecutive quarters of Gross Domestic Product (GDP) contraction, bottoming at -2.3 percent in the third quarter of 2017, having grown by nearly seven percent in previous years; rising inflation, peaking at over 18 percent in January 2017, from as low as nine percent in January 2016.
He said the foreign reserves would continue to grow, adding that the reserves may hit $50 billion sometime later this year.
According to him, there was also persistent increase in unemployment rate to 16.2 percent in the second quarter of 2017, from 8.2 percent at the same period of 2015; significant depreciation of the exchange rate, reaching N520 to $1 in February 2017, from as low as N155/$1 in June 2014.
He said, “In light of these and other policy responses, we are delighted that the economy has turned the corner with our worst days clearly behind us. For example, the GDP recovered after five quarters of continuous contraction, recording positive growths of 0.7 and 1.4 percent in quarters two and three of 2017, respectively, and signalling an exit from the recession; inflation declined from a peak of 18.7 percent in January 2017 to 14.3 in December 2017; exchange rate appreciated significantly from over N525/$1 in February 2017 to about N360/$1 today, tapering premium across various windows and segments of the market.”
Emefiele added that there was a boost in local production, which he attributed partly to the CBN’s development finance efforts and the dogged implementation of its foreign exchange (forex) policies.
“Today, many local manufacturers are reporting major boosts to their revenue and profit. Whilst basking in the delight of these accomplishments, what then must we do to sustain them and ensure that we do not slide into another recession?
“Those of us who have been entrusted with leadership and policy-making responsibilities must neither become complacent nor over-confident. We must strive to improve and sustain the same policies that have gotten us this far,” he said.
Emefiele said though the import bill might have fallen, the manufacturing and agriculture sectors still have a long way to go to attain self-sufficiency in those sectors.