Emefiele to reposition banks in second tenure
Deposit Money Banks will be repositioned in the next five years to make them contribute significantly to economic growth.
The Governor of the Central Bank of Nigeria, Godwin Emefiele, said he will in his next tenure, work with banks to boost credit to the real sector as well as the creative and education sector.
Emefiele while unveiling his economic blueprint for the country, promised to recapitalise banks to make them contribute significantly to economic growth.
The governor said he would also pursue an economic agenda that would make the economy grow by double digits through targeted programmes that would boost output.
He said the discovery of crude oil and the country’s increasing reliance on crude oil revenues have led to a severe downturn in the agriculture and manufacturing sectors.
The CBN governor said given Nigeria’s dependence on crude oil revenues for close to 86 percent of the country’s foreign exchange earnings and over 60percent of government expenditure, the drop in prices in 2014 led to heightened inflationary pressures, depreciation of exchange rate, significant drop in external reserves, and eventually, the recession of 2016.
He said, “At a point in our nation’s history, Nigeria survived on revenues from the non -oil sector, to the extent that we were a dominant exporter of agricultural produce into the global market.
“Some of these products include cocoa, groundnuts, cotton and palm oil. Our focus in agriculture supported the raw material needs of our industrial sector and created employment opportunities for millions of Nigerians.
“Regrettably, the discovery of crude oil and the increasing reliance on crude oil revenues led to a severe downturn in the agriculture and manufacturing sectors, while also exposing our economy to the vulnerabilities that normally accompany an increased dependence on a single commodity for survival.”
He said the rising volatility in the crude oil market, occasioned by the rapid increase in the supply of shale oil by the United States, which had seen its production rise from 9 million barrels in 2017 to over 12 million barrels, currently posed risks to the Nigerian economy.
In order to reduce the reliance on the importation of items that could be produced in Nigeria, he said the bank restricted access to foreign exchange on 43 items while deploying intervention funds to support growth and productivity in the agricultural and manufacturing sectors.
With these challenges, Emefiele said the bank put all necessary measure to ensure the steady growth of the country’s external reserves after the recession, which stood at 45 billion dollars as of June 2019.
“I am delighted to note that our external reserves have risen from 23 billion dollars in October 2016 to over 45 billion dollars by June. Inflation has also dropped from 18 .72 percent in January 2017 to 11 40percent in May.
“Our CBN purchasing manufacturers index has risen for 26 consecutive months since March 2017, indicating continuous growth in the manufacturing sector.
“As a result of measures implemented by the CBN which improved access to raw materials and finance for manufacturing firms GDP growth has risen for seven consecutive quarters following the recession,” he said.