AfCFTA: CBN seeks stronger economic policies
The Monetary Policy Committee of the Central Bank has called for more effective measures that will drive economic growth and enable the country benefit from the African Continental Free Trade Agreement, AfCFTA, trade policy.
The committee urged the federal government to put in place processes to aid the economy in realising the benefits and full potentials of that Agreement.
Rising from its July 2019 meeting in Abuja, the committee advised the federal government to resuscitate moribund industries and improve key infrastructure in order to strengthen the productive base of the economy, create job opportunities as well as boost exports.
In a communiqué released at the end of the meeting, the CBN also noted “the positive developments towards the creation of a common currency in the West African Zone by January 2020 and commended Government and the Central Bank for pushing forward the initiative.”
The CBN Governor, Godwin Emefiele, who read the communiqué however, enjoined the Bank to ensure that Nigeria is properly positioned to maximise the benefits of monetary integration.
He said the MPC also called on the fiscal authorities to expedite action in expanding the tax base of the economy to improve government's revenue and stem the growth in public borrowing.
Emefiele said the committee further urged the fiscal authorities to build fiscal buffers to avert macroeconomic downturn in the event of a decline in oil prices.
The committee urged the apex bank to intensify efforts in encouraging Nigerians living abroad to use official sources for home remittances.
He noted that this effort would complement other measures geared towards improving Nigeria’s current account balance.
Speaking on the plan to restrict foreign exchange for milk importation, Emefiele said this was born out of the need to encourage local production of the product as well as support the dairy value chain.
“We believe milk is one of the products that can be produced in Nigeria today. You all must have heard me at different forums say that we had seen the importation of milk into Nigeria before many of us were born, precisely over 60years.
“Today, the import of milk annually stands at between $1.2 billion and $1.5billion. That is a very high import product into the country, given that it’s a product that we are convinced that can be produced in the country.”
He called on the management of milk companies in Nigeria to support the policy, adding that the local production of milk would reduce the persistent clashes between farmers and herders.
“We are determined to make milk production in Nigeria a viable economic proposition. By the time we restrict you, if you need a loan to acquire land we will give you. If you need a loan to grow your grass, we will give you.
“I think we are getting to the end of road. I will repeat; we are really getting to the end of the road. The era of restriction of forex for importation is coming sooner than expected.”
At the end of the meeting, the committee voted to hold all rates constant as the previous MPC meeting. “The Committee decided unanimously by a vote of all members present to retain the Monetary Policy Rate (MPR) at 13.5 percent and to hold all other policy parameters constant.”
He said this is based on the “conviction of members that key macroeconomic indicators are trending in the right direction.”