CBN Supports Protectionism Measures Targeted At Growing Nigeria’s Economy

Emefiele

***Cites Restrictions Of Foreign Exchange For Importation Of 41 Items

By CLEMENT NWOJI, Lokoja

The Central Bank of Nigeria (CBN) has thrown its weight behind any protectionism measures targeted at growing the nation’s economy.

It cited that restrictions on availability of foreign exchange for importation of 41 items helped the nation to recover from recession it experienced in the recent past.

The CBN Governor, Godwin Emefiele, said the restriction of availability of foreign exchange for the importation of the 41 items constitute part of monetary policy protectionism measures meant to grow the nation’s economy and shield it from being a dumping ground.

The CBN Governor spoke while delivering a keynote address at the three-day 26th Seminar for Finance Correspondents and Business Editors which theme is “Monetary Policy Implementation Amidst Global Economic Protectionism”, in Lokoja, Kogi state.

Protectionism entails restriction of trade between nations, utilizing means such as tariffs on imported goods, restrictive quotas, and a variety of other inhibitive government regulations, designed to discourage imports and prevent the foreign dominance of local markets
to spur the domestic economy for enhanced local production and to discourage dumping in order to protect domestic industries from foreign take-over or competition.

Represented by the Director, Monetary Policy Department, Moses Kpughur Tule, Emefiele noted that Nigerians with insatiable appetite for foreign goods cannot be allowed to embark on importation of virtually everything to the detriment of the economy.

He said: “In today’s world, Countries have used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries.

“In other words, should Nigeria with insatiable taste for foreign goods to the detriment of the domestic economic realities (unemployment and imported inflation) throw its borders open to indiscriminate importation of goods and services?

“This was the prevailing condition in Nigeria before the introduction of restriction of official foreign exchange for the importation of 41 items.

“It was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting GDP-recession and an embarrassing rise in the level of unemployment confronting the economy.

“The implementation of the 41 items, in addition to the other complementary macroeconomic policies, no doubt, was effective in lifting the Nigerian economy out of recession.

“For example, the real Gross Domestic Product (GDP) grew by 1.40 per cent in the third quarter of 2017, up from 0.72 per cent, and contraction of 0.91 per cent in the second and first quarter of 2017, respectively. Also, there has been improved reserve accretion to the country’s reserve.

“Given these salutary effects on the economy; it can be argued that the stance of Classical economists argued that trade protectionism notwithstanding, to override the utility of selective protection in form of the 41 items to resolve the challenges facing the economy can hardly be overemphasized.”

Others who made presentation of papers include the CBN Director, Monetary Policy Department, Mr. Moses Tule on “Monetary policy options in an era of trade protectionism” and Prof. Uche Uwaleke, Head of Department of Banking and Finance, Nasarawa State University, on “Understanding the resurgence of protectionism and its impacts on emerging economies”.