The Governor of Central Bank of Nigeria, CBN, Mr Godwin Emefiele, yesterday,said the decision of the bank to allow the current multiple exchange rate regime in the country was to encourage Small and Medium Enterprises, SMEs, thrive.
This was even as he disclosed that the bank was planning to converge the multiple foreign exchange rates in Nigeria into a uniform system in the long term.
He spoke in Abuja, at the 3rd All Civil Society National Economic Summit on Sustainable Economic Policy Strategy in the Face of Economic Progression.
The conference, which attracted participants from the 36 states and the Federal Capital Territory, FCT, was organised by the Coalition of Civil Society Groups, CCSG.
Emefiele, who spoke through his Special Adviser, Mr Emmanuel Ukeje, noted that before now, it was difficult for those who were involved in SMEs to get foreign exchange from banks, said the CBN had realised that “it was these SMEs that were needed to grow the economy and gave the directive to commercial banks to issue foreign exchange to SMEs at cheaper rates to SMEs so that their businesses can still remain profitable.”
He said “The same thing is applicable for medicals, those who want to pay school fees, and those who want to pay for health services overseas which hitherto, they would have been forced to go the black market or the parallel market to purchase.”
According to the CBN governor, “We know that one exchange rate is ideal and in the longer term, we are talking about convergence of exchange rates, but for now, we need to actually encourage some of those who particularly need this foreign exchange to produce goods and create jobs.”
Emefiele said that external factors such as the global commodity price shock, normalisation of U.S. monetary policy, capital flight away from emerging markets, fragile macroeconomic conditions and geopolitical tensions were the drivers of the 2016 economic recession experienced in Nigeria.
He said that most economies even graduate from recession to depression, but in not too long a period, “Nigeria was able to turn that around which took a lot of collaboration between the CBN and the fiscal authorities.”
“For the CBN, what will continue to pursue is to ensure that we drive inflation further down; inflation if not properly controlled can erode your income and the CBN has the responsibility for price and foreign exchange stability,” he said. .
According to the CBN, “We owe it as a responsibility and we want to continue to ensure that we have price stability both in controlling inflation and maintaining exchange rate stability. The CBN will continue to support activities that will ensure diversification of the economy and aiding export and local production which will generate employment.”
“We believe that all the efforts of the CBN are aimed at increasing productivity in the real sector, which will translate to a reduction in the cost of production and lower cost of doing business and lower interest rates,” he added.
Also speaking at the event, CBN‘s Director of Development Finance, Dr Mudashi Olaitan, said the sub theme of the conference, ‘Youth employment: The Effect of CBN policies and Interventions” is very apt and strategic particularly at this time when the federal government is focusing on employment generation as the fulcrum for economic growth and development, in its effort to transform the Nigerian economy and harness the enormous potentials of the Nigerian youth.
“It underscores the increasing need for radical rethinking of youth employment as an important strategy for the government’s economic diversification agenda,” he said
He said that the youths constitute a significant share of the entire Nigeria labour force and regretted that the Nigeria economy has, however, underperformed in terms of investing in youths to support economic development as the nation faces the stark reality of high youth unemployment and underemployment which stands at 40.6 per cent and 58.6 per cent at the end of 2016.
“The CBN as a major stakeholder in real sector development of the country has initiated the Micro Small and Medium Enterprise Development Fund, Entrepreneurship Development Centres, National Collateral Registry and Financial Literacy Initiatives to enable youths contribute significantly to government’s diversification and development agenda,” he said.
Also, the General Manager, SMEs at the Bank of Industry told participants to harness the enormous business opportunities in Nigeria by venturing into entrepreneurship and manufacturing good and services.
He said “The bank, before now was focused at developing SMEs but we have realised that without addressing youths in the bottom of the pyramid, there is no way these SMEs can thrive. We felt that there is the need to create a linkage between the SMEs and the youths. That is why we have invested heavily in youth development.”
Earlier, the Present of CCSG, Etuk Bassey Williams observed that the long term economic growth is fundamental to Nigeria’s future while urging support for the CBN and the BOI to ensure a stable and sustainable economic growth.