On assumption of duty as the Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, gave strong indications that he will not limit himself to monetary policy issues alone. To wit: concentrating on exchange stability, foreign exchange matters and financial systems stability.
He also made it known that in delving into other sectors, the CBN on his watch, will initiate policies that will, in a dramatic way, impact on the economy. The baseline argument of this eminent banker was and still is, that time has come for the economy to be diversified so as to wean it off its mono-cultural proclivities and place it in a position to better serve the needs and expectations of Nigerians in the areas of job creation, economic empowerment and preservation of foreign exchange.
Emefiele chose agriculture as his main take off point in this bold policy drive to give Nigeria and Nigerians alternative sources of revenue generation. Before him, it was not as if Nigerians did not understand that agriculture could make immense contributions to the nation’s Gross Domestic Product (GDP). What was lacking was the gusto of a can-do man as well as the political will on the part of previous administrations who felt that the tedium of agricultural practice was a waste of time and energy in an environment in which the petro-dollar was flowing.
Like a man who saw tomorrow, consumed by the passion and courage of his conviction, he warned that tying the nation’s economy inextricably to a wasteful, non-renewable resource was not only economically suicidal but also avoidable in a country with sprawling arable land and a large youth population merely waiting to be shown the way. In no time, he was proved right as the fluctuations in the oil trade and dwindling returns as a result of price instability in the international oil market played no little role in pushing the country into needless recession.
His emphasis on the urgency of diversifying the nation’s economy is beginning to be proved right again with the price war between Saudi Arabia and Russia and also with the outbreak of coronavirus Infectious Disease-19 (Covid-19) which has introduced a disastrous dimension to an already delicate situation. I will return to Covid-19 later.
When he launched his agricultural policy, critics argued that he was exceeding his mandate as the nation’s number one banker. They even suggested that monetary policy issues may suffer due to lack of appropriate attention. That the value of the nation’s currency, the Naira, is stable now is proof that being an effective team leader has helped him in mobilising the CBN platform to be alive and active. Similarly, the successes so far recorded by his star programme, the Anchor Borrowers’ Programme (ABP) that has made the country almost self-sufficient in rice production, makes it obvious to discerning minds that he was right in his decision to place himself in a historical position as the CBN Governor that has made the most positive impact on agriculture which is unarguably the largest employer with the potential that, if harnessed adequately, can lift the GDP even higher. It is not just rice, there is also a massive reactivation of oil palm production and other agricultural produce that had defined the local food chain.
Through this ingenious master stroke he, in one fell swoop, reduced immeasurably the nation’s food import bill, created millions of jobs and saved scarce foreign exchange hitherto wasted on importation. He enhanced agri-business complete with agri-processing when he took out 43 items from the foreign exchange list. What this policy revealed is that the country has the capacity to produce locally items she has been importing over the years. Investors and exporters were exceedingly excited with the foreign exchange window opened to them which led to an increased patronage of made in Nigeria goods and services. This is a major culture change from patronising foreign made goods as a status symbol to proudly being Nigerian.
CBN, with him as the helmsman, put in place financial instruments and interventions that helped and are still helping previously dormant sectors of the economy to get up and play their assigned roles in national development. Before his intervention, cotton and textile sectors of the economy were in the doldrums. CBN is revitalising that sector through a string of incentives ranging from the supply of high yielding cotton seedlings, financial inclusions for farmers and textile manufacturers who need same to retool their machines to putting end product users in a position to off-take the materials so produced.
The ban on textiles and convincing key local consumers of textile materials to patronise locally manufactured fabrics are two policy thrusts that are aimed at ensuring that highly subsidised and cheaper imported fabrics did not have any more negative effect on the sector as was the case before Emefiele’s intervention. Also benefitting from the CBN lifeline are the real sector, media, aviation, power and health. And yet these sectors were economy leaders that were left to flounder because of a loss of focus.
As stated earlier, coronavirus and its devastating manifestations are enhancing the doctrine of diversification even more than Emefiele envisaged. Without warning, the disease has driven nations, including the so-called developed ones, into a sort of primitive frenzy where the fear of the disease has led to a disruption in export and import business, flight cancellations, conferences and even mundane practices as ordinary as handshake. What is beginning to emerge is an attitude on the part of nations not to trust anyone else to the point that food and other items of trade from Covid-19 endemic countries are viewed as contaminated too.
If Emefiele had not pursued, with a missionary zeal, his diversification policy especially in agriculture and the nation had continued to import rice, for instance, with Covid-19 now, there would have been a food crisis that could have worsened the dread of the disease and the challenge it poses to public health.
Covid-19 is, therefore, a call to action from the economic point of view. It reiterates the necessity of backward integration, looking inwards so as to be able to achieve self-sufficiency in basic things like food. Funny enough, all those who resorted to arm chair criticisms of Emefiele’s diversification policies and who canvassed blind globalisation are today afraid to leave the comfort of their bedrooms for fear of contacting Covid-19.
But do we, as Nigerians, need the disease or vagaries in the oil market to alert us on the propriety of doing the right thing for the nation and the economy?
– Kabir, a public affairs commentator wrote from Lafia
Add Comment