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Nigeria’s foreign exchange buffer hits $41.1 bln by Oct 22

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…Emefiele says Forex reserves among Africa’s highest

…Blames SAP for naira free fall

…Announces introduction of “The 100 for 100 PPP – Policy on Production and Productivity”

By Oludare Mayowa

The Central Bank of Nigeria (CBN) on Monday said the country’s foreign exchange buffer has crossed the pyschological $40 billion mark an has become one of the highest in the continent of Africa.

According to the CBN Governor, Godwin Emefiele, who spoke while launching the country’s first digital currency, eNaira in Abuja, Nigeria’s foreign xchange reserves are strong and getting stronger by the day.

A visit to the regulatory bank’s website showed that the foreign exchange buffer climbed 14.35 percent in one month to $41.11 billion as of October 22, 2021 from N35.95 billion a month earlier.

Analysts attributed the increased in the forex reserves to two factors; namely, the inflow of $4 billion Eurobonds raised at the International Capital Market (ICM) in September and the flow of the allocation of Special Drawing Rights (SDR) worth $3.4 billion by the International Monetary Fund (IMF).

Speaking at the eNaira launch, Emefiele assured President Buhari that “as custodians of your national reserves, let me first assure you that there is no cause for alarm.

”Our FX reserves are strong and indeed getting stronger by the day, crossing the 40 billion USD mark, and is one of the highest in Africa – and growing.

”But we cannot fritter our reserves away on cheap imports and currency speculators. We must return to an employment-led growth anchored on productivity and rewarding producers of local goods, services, innovation and new technologies.

”If you consume cheap imports and export our jobs, we will make you pay dearly; but if you produce locally – with little or no foreign inputs beyond machinery, we will support you, and the markets will reward you abundantly.

He blamed the free fall of the naira on the failure of the country to achieve the the objectives and promises of the Structural Adjustment Programme (SAP)  launched 35 years ago by the Ibrahim Babangida’s military regime.

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”Mr. President, as you make ground breaking reforms, there have been continuing debate on the true value of the Naira. Rather than worry today on the direction of the exchange rate, let us take a step back and analyze how we got here in the first place.

“Please recall that since the advent of the International Monetary Fund (IMF) led Structural Adjustment Programme (SAP) in 1986, and the introduction of the Second Tier Foreign Exchange (SFEM) market, the Naira has been on a one-way free fall from parity to the US Dollar in 1984 to over N410/USD today.

“Some 35 years later, we have not been able to achieve the many promises and objectives of that programme.

“Instead, what we have seen is widespread import dependency, which has wiped out most of our production and manufacturing bases and exported all our jobs in the process.

“What has happened to the massive textile factories across our nation such that we import almost all cotton products when we are rich in cotton?

“What has happened to our vehicle assembly plants across the nation such that we import most vehicles and have become a massive dumping ground for dying second-hand vehicles?

”What has happened to our rubber plantations through which we made the best tyres and rubber products in the world? What has happened to our groundnut pyramids? What has happened to our Cocoa farms? What has happened to our palm oil mills?

“Under your leadership, Mr. President, we must stop this decline for good! We must return to massive homemade production; we must get our people working again. We must create the economic environment for massive domestic production and significant non-oil exports,” Emefiele said.

At the event, the regulatory bank chief announced a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in the Development Finance Department under his direct supervision.

He explained that under this policy the CBN would advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm.

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