Emefiele decries forex scarcity, tasks bank chiefs on supply

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BY BAMIDELE FAMOOFO

Uba Group

Governor of the Central Bank of Nigeria, Godwin Emefiele, has charged leaders of the Nigerian banking sector to brainstorm expansively on ways to resolve the shortage of foreign exchange (forex) in the country.

Emefiele, who spoke at the 13th annual Bankers’ Committee retreat in Lagos, on Friday, emphasized the urgent need to develop the non-oil sector, lamenting that foreign exchange receipt from crude oil sales has dried up from above $3 billion monthly in 2014 to an absolute zero dollars.

“There is a clear shortage of foreign exchange today. But yet as Bankers, we must meet the needs of our customers. Market is tight, and I know we don’t have a choice; we will have to do something to ensure that this problem is solved.

“That is the reason we decided that this retreat must focus on RT200 essentially. How do we begin to think about how to source foreign exchange for our customers’ import needs without necessarily depending on revenue from crude, which like you all know has come to almost zero compared to almost about $3 billion monthly that we’re getting in 2014,” he said.

Recognising the hindrances of high inflation and foreign exchange shortages on the achievement of national development goals, Emefiele said the 2022 retreat, themed: ‘Increasing the Productive Base of the Nigerian Economy and Non-Oil Export Revenues,’ was convened to focus on the development of the local manufacturing industry and non-oil sectors, more broadly, and particularly to enhance the sector’s capacity to generate foreign exchange inflows.

He said the focus is even more germane considering the enormities of the global economic turbulence, as wave after wave of negative shocks continue to ravage many countries.

The apex bank governor stressed that since the last retreat, the expected recovery of the global economy from the COVID-19 shock has been wiped away and replaced by new shocks from the Russian-Ukraine war and the unprecedented stalling of the Chinese economy.

“Aside the social costs of these, in terms of its attendant despair, destruction, and destitution, they heralded new economic challenges as energy crisis, cost-of-living crisis, macroeconomic crisis, and climate crisis continue to ravage the world and undermine policy efforts of nations. These strong headwinds have retarded growth momentum, worsened global conditions, amplified risks and uncertainties, and dampened global outlook. Accordingly, and like many other countries, Nigeria’s GDP growth fell gradually from 5.03 per cent in 2021Q2 to 3.98 per cent in 2021Q4, 3.54 per cent in 2022 Q2 and 2.25 percent in 2022 Q3,” the CBN Governor added.

While acknowledging the collaborative programmes and initiatives of the Bankers’ Committee to deliver tangible contributions to the nation’s economic prosperity, he said the RT200 programme was launched in February to stimulate non-oil exports with a $200 billion foreign exchange income target in three to five years.

Noting that the initiative has been widely accepted and driven by the institutions that constitute the Bankers’ Committee, he said the retreat provides opportunity to review the progress of RT200, re-examine support for other government programmes to promote non-oil export and to identify specific implementable actions by the financial system to enhance foreign exchange revenues
“We can no longer delay in resolving the structural issues inhibiting non-oil export receipts. We must strengthen the immunity and engender the resilience of our economy against exogenous shocks,” Emefiele said.