Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele has said with Nigeria’s population growing by over three percent per annum over the past seven years, against a less than steady growth in output since 2019, expanding the production and industrial capacity of the economy must be given special attention to ensure overall macroeconomic stability.
Mr Emefiele made the call yesterday at a workshop for business editors and finance correspondents in Abuja with the theme: Policy Options for Economic Diversification: Thinking Outside the Crude Oil-box.
This is even as experts have advocated governance reforms and rationalization as well as diversification for economic growth.
Nigeria, through the CBN, had in the last few years increased funding into rice farming to meet local demands as well as export.
Also, CBN’s director, trade and exchange department, Dr Ozoemena Nnaji disclosed that the bank’s Naira-4-Dollar policy has recorded $2.4 billion between January this year and now.
Mr Emefiele who was represented by the director, corporate communications in CBN, Osita Nwasinobi said the quest for building a more sophisticated economy anchored on agriculture, MSMEs, industrial and manufacturing concerns have become the major component of CBN’s monetary policy.
The CBN governor urged all Nigerians to play their role in supporting efforts aimed at diversifying the economy. He advised the participants to help identify ways of fine-tuning policies to optimize the benefits of the numerous growth propelling initiatives being pursued by the CBN.
Nigeria has largely depended on the oil sector for revenue generation over the past four decades and the sustained decline in crude oil production has continued to nega
Emefiele said it is important that Nigeria works to create an economy “that will enable us feed ourselves, create jobs for our teeming youths and improve the standard of living of our people.”
Emefiele said the bank’s continued support to the manufacturing sector and MSMEs have been yielding great results as the implementation of 44 items not valid for FX for imports has revealed. Particularly, he disclosed that its intervention in the health sector, for example has begun to reduce the health care tourism being sought outside the country which he said is “helping to conserve our foreign exchange and improve our well-being.”
He stressed the need for a change in the narratives of depending on a mono-product oil-led economy, towards building a broad-based and well diversified economy that guarantees overall macroeconomic stability.
On the apex bank’s policies directed at boosting local production and foreign earnings, Emefiele noted that, the CBN’s continued support to the manufacturing sector and Micro, Small and Medium Enterprises(MSMEs) have been yielding great results, citing that, the intervention in the health sector, has begun to reduce the health care tourism being sought outside the country which is helping to conserve the nation’s foreign exchange.
“The new 100 for 100 Policy on Production and Productivity (PPP), which is targeted at harnessing our local raw materials to increase our domestic production, as well as exports through our deliberate credit and other supports, will soon begin to yield quality results, he pointed out.
Meanwhile, other experts at the event, advocated governance reforms and rationalization as well as diversification for economic growth.
The experts noted that, though, the fiscal authorities have always mooted the idea of economic diversification, he said, the inability to commit to such idea has been the problem.
CEO of Adedipe & Associates Dr Biodun Adedipe collaborated Emefiele’s call when he said Nigeria must shift focus to industrial production, professionalize the civil and public sectors and reform fiscal operations to better diversify the Nigerian economy.
While delivering a paper on ‘Policy Options for Economic Diversification: Thinking Outside the Crude Oil-Box’, Adedipe said, over-reliance on oil and its proceed is equally affecting the diversification agenda of the government, noting that, reforming and rationalizing governance is the root of policies, programs and projects.
Similarly, he said, penchant for foreign goods by Nigerians is one major issue draining the foreign exchange, urging Nigerians to be patriotic and patronize Made-In-Nigeria goods.
Stating that the current fiscal structure is convoluted and costly, which is draining the economy, he advised that, the number of ministries, departments and agencies be pruned, eliminate duplications and realign responsibilities, adequately resource, define clear and clean KPIs for the MDAs and ensure accountability from the top leadership.
Calling for professionalisation of both the civil service and public service to address the current economic quagmire, doing so, he said, will extract value from the MDAs, even as he advocated meritocracy and diversity in appointments, while identifying MDAs that directly drive the economy and appoint proven professionals to lead them.
“Reduce the size of MDAs and pay well, align pay to productivity, retention in office, redeployment or exit must depend on performance and ensure accountability from the top leadership,” he advised.
While moving for fiscal operations reforms and address the revenue/expenditure nexus, he urged government to rationalize fiscal spend; eliminate leakages as well as set goal of 5-year target to equalize recurrent spending with non-oil revenue.
He prescribed effective sanctioning of corrupt and negligent civil and public servants, especially, errant leaders while enforcing expenditure rules and punish clever circumventions.
“Focus on industrialization because this is the crux of the matter, revisit and update the National Industrial Revolution Plan, select sectors of importance for import substitution! identify sectors and products for export-led growth, provide relevant incentives, including tariff restructuring that focus on regional competitiveness,” he advised.
Urging Nigerians, including government and the people, to commit to ‘Make-in-Nigeria’ and ‘Made-in-Nigeria’ he called on government to target infrastructure development at industrial clusters, while prescribing Public Private Partnership(PPP) for infrastructure delivery .
Seek successful Diaspora Nigerians to partner with and provide them incentives for local developments of and involvement in medical facilities, he pointed out.
He urged the fiscal authorities to equate recurrent expenditure component of the annual national budget with non-oil earnings to reduce vulnerability of the economy.
Dr Adedipe who said borrowing was not a bad thing for any nation said instead of taking the loans, federal government should engage private sector partners for infrastructure delivery. “If we must borrow, let the borrowing be done by the private partners for timely delivery,” Dr Adedipe said.
He also said government should come up with a model that will allow private sector players to finance the nation’s education sector.
Also, Professor of economics and capital market, Uche Uwaleke said private sector needs to support government to fund education.
Uwaleke also urged the central bank to improve on its Naira-4-Dollar policy for better result.
The President, Manufacturers Association of Nigeria(MAN), Engr Mansur Ahmed, called for synergy between the fiscal and monetary policies for the CBN intervention to yield the desired results.
This, he said, will ensure that the apex bank intervention are deployed to those who needed it, working harmoniously with the government agenda for quick ripple effect of the CBN intervention.