Emefiele: Thinking ahead for a new Nigeria
In June, 2014 when Mr. Godwin Emefiele assumed the position of the Governor of the Central Bank of Nigeria (CBN), little did the country realize that a great thinker and banker, indeed, someone that could be called, an ‘economic philosopher’ has ascended the throne?
Deservedly, the Governor merits commendation but this piece is not meant to eulogize him, because there are numerous writers who can and have been doing that much better. Our job here is to flag, once again, many of Emefiele’s deep thoughts and how he has, methodically, woven those thoughts into actionable pillars of economic development in concert with the present administration of President Muhammadu Buhari.
As CBN Governor, it could be argued that Mr. Emefiele neither possesses the royal mien of Dr. Sanusi Lamido Sanusi, the dethroned Emir of Kano, nor the oratorical brilliance of Professor Chukwuma Soludo, ‘Mr. Consolidation’ but he has, in our estimation, surpassed these men in deep thinking and prediction of the future of the Nigerian economy and has, as always, provided the required antidote at every turn.
Turning COVID-19 pandemic into opportunity
Let’s now examine his recent treatise on “Turning COVID-19 tragedy into opportunity for New Nigeria” released in Abuja on April 15, 2020. The paper encapsulates what the CBN had been doing since Emefiele took over as the Governor as if he had premonition of a future that would be riddled by a novel disease of the dimension of COVID-19 pandemic. The paper also revealed timelines and measures set by the CBN to contain the COVID-19-induced recession going forward.
First, he reflected on the actions taken by countries such as Germany, United States of America, France, India, including 32 other countries under the WTO protocols to either restrict or ban exports of essential medical drugs and items necessary for the treatment and prevention of transmission of COVID-19 disease. Again, several countries, he said, have resorted to export restrictions of critical agricultural produce in the face of the worries about unprecedented global food insecurity with concerns that agricultural production may be dislocated by containment measures that constrain workers from planting, managing and harvesting critical crops.
Characteristically, he posed the inevitable questions, “What if these restrictions become the new normal? What if the COVID-19 pandemic continues in a second wave or another pandemic occurs in which all borders are shut, and food imports are significantly restricted? What if we cannot seek medical care outside Nigeria and must rely on local hospitals and medical professionals? For how long shall we continue to rely on the world for anything and everything at every time?”
However, Emefiele expressed optimism that, “Although these developments are troubling, they present a clear opportunity to re-echo a persistent message the CBN has been sending for a long time, and at this time even more urgently so: we must look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for our people.
For a country of over 200 million people, and projected to be about 450 million in a few decades, we can no longer ignore repeated warnings about the dangers that lie ahead if we do not begin to depend largely on what we produce locally, because the security and well-being of our nation is contingent on building a well-diversified and inclusive productive economy”.
For the benefit of hindsight, he said, “When I became Governor of the Central Bank in June 2014, imports of rice, fish, wheat and sugar alone consumed about N1.3 trillion worth of foreign exchange from the Bank. The immediate question that came to my mind was: can we not grow these ourselves? After all, only a few decades ago, Nigeria was one of the world’s largest producers and exporters of palm oil, cocoa and groundnuts”.
“Today, we import nearly 600,000 metric tonnes of palm oil, whilst Indonesia and Malaysia, two countries that were far behind us in this crop, now combine to export over 90 percent of global demand. In 2017, Indonesia earned US$12.6 billion from its oil and gas sector but US$18.4 billion in from palm oil. I believe that this pandemic and the immediate response of many of our trading partners suggest it is now more critical than ever that we take back control, not just control over our economy, but also of our destiny and our future”.
Vision consistency and policy implementation
According to the Governor, “In line with the vision of President Muhammadu Buhari, the CBN has indeed created several lending programmes and provided hundreds of billions to smallholder farmers and industrial processors in several key agricultural produce”.
“These policies are aimed at positioning Nigeria to become a self-sufficient food producer, creating millions of jobs, supplying key markets across the country and dampening the effects of exchange rate movements on local prices.
This philosophy has been a consistent theme of the CBN’s policies over the last couple of years. At the 2016 Annual Bankers’ Dinner, I challenged the bankers that we needed to take decisive actions to fundamentally transform the structure of our economy. Throughout that speech, I talked about the damaging effects of Nigeria’s unsustainable propensity to import, and opined that it was high time we looked inwards and stopped using hard-earned foreign exchange (FX) to import items that we could produce locally.
This determination, therefore, formed the bedrock of the Bank’s policy, which restricts access to FX for importers of many items. These sentiments were re-echoed at the 2017 edition of the same Bankers’ Dinner, with specific examples of several companies that have benefited significantly from this policy of self-sufficiency. With President Buhari’s full support, we have continued to refine this policy to ensure that the best interest of Nigeria is served”.
Stimulus Package of N3.5trillion to protect economy
Donald Trump, the maverick American President is one that believes strongly that American economy must be protected for the benefit of the Americans, same for many other World leaders, Ministers and Central Bank Governors. The CBN Governor thinks in the same direction.
Hear him, “Many times, the Bank has been accused of promoting protectionist policies. My answer has always been that leaders are first and foremost accountable to their own citizens. And if the vagaries of international trade threaten their wellbeing, leaders have to react by compelling some change in patterns of trade to the greater good of their citizens”.
“That is why in response to COVID-19, we are strengthening the Nigerian economy by providing a combined stimulus package of about N3.5 trillion in targeted measures to households, businesses, manufacturers and healthcare providers. These measures are deliberately designed to both support the Federal Government’s immediate fight against COVID-19, but also to build a more resilient, more self-reliant Nigerian economy.
We do not know what the world will look like after this pandemic. Countries may continue to look inwards and globalization as we know it today may be dead for a generation”.
Like a die-hard philosopher, Emefiele continues to win converts to his idea of a New Nigeria. Recently, the CBN Governor, in a virtual meeting with CEOs of large companies and conglomerates operating in Nigeria, enjoined them to key into the current administration’s drive of diversifying the base of the Nigerian economy, because the apex Bank would not support the importation of items that could be produced in the country”.
We strongly believe that the thoughts and words of the CBN Governor is in sync with the general feeling of the masses and it is the only way to go for a New Nigeria and COVID-19 pandemic offers such wonderful opportunity to begin. Indeed, as the Governor noted, “The time has come to fully transform Nigeria into a modern, sophisticated and inclusive economy that is self-sufficient, rewards the hardworking, but protects the poor and vulnerable, and can compete internationally across a range of strategic sectors.”
Justus Nduwugwe is Editor, Facts and Figures magazine (factsandfigures.ng), and can be reached on [email protected] (08036178577)