*Godwin Emefiele, Governor of the Central Bank of Nigeria, explains factors responsible for current shortage of Foreign Exchange, charges leaders in the banking sector of the economy to think up effective ways of meeting the needs of customers

Isola Moses | ConsumerConnect

Amid the recent Foreign Exchange (Forex) crisis affecting individuals and businesses, Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), has tasked leaders of the Nigerian banking sector to evolve practical ways to resolve the shortage of Forex in the economy.

Emefiele stated this when he spoke at the recent 13th Annual Bankers’ Committee Retreat in Lagos, report said.

At the 2022 Retreat with the theme, “Increasing the Productive Base of the Nigerian Economy and Non-Oil Export Revenues”, the CBN Governor stressed the urgent need to develop the non-oil sector, lamenting that Forex receipt from crude oil sales has dried up from above $3 billion monthly in 2014 to absolute zero Dollars.

“There is clear shortage of foreign exchange today. But yet as Bankers, we must meet the needs of our customers.

“Market is tight. And I know we don’t have a choice; we will have to do something to ensure that this problem is solved.”

Emefiele also noted: “That is the reason we decided that this retreat must focus on RT200 essentially.

“How do we begin to think about how to source foreign exchange for our customers’ import needs without necessarily depending on revenue from crude, which like you all know has come to almost zero compared to almost about $3billion monthly that we’re getting in 2014.”

Local production, non-oil sector to boost capacity to attract Forex inflows

In recognising the implications of high inflation and Forex shortages on the achievement of national development goals, he said the 2022 Retreat was convened to focus on the development of the local manufacturing industry and non-oil sectors, more broadly, and particularly to enhance the sector’s capacity to generate foreign exchange inflows.

The focus is even more germane, considering the enormity of the global economic turbulence, as wave after wave of negative shocks continue to ravage many countries, said Emefiele.

He further explained since the last Retreat, the expected recovery of the global economy from the COVID-19 shock had been eroded and replaced by new shocks from the Russian-Ukraine war and the unprecedented stalling of the Chinese economy.

The CBN Governor said: “Aside (from) the social costs of these, in terms of its attendant despair, destruction, and destitution, they heralded new economic challenges as energy crisis, cost-of-living crisis, macroeconomic crisis, and climate crisis continue to ravage the world and undermine policy efforts of nations. “These strong headwinds have retarded growth momentum, worsened global conditions, amplified risks and uncertainties, and dampened global outlook. “Accordingly, and like many other countries, Nigeria’s GDP growth fell gradually from 5.03 percent in 2021 Q2 to 3.98 percent in 2021 Q4, 3.54 percent in 2022 Q2 and 2.25 percent in 2022 Q3.”

Bankers’ Committee initiatives to advance  economic prosperity

According to Emefiele while acknowledging the collaborative programmes and initiatives of the Bankers’ Committee to deliver tangible contributions to the country’s economic prosperity, the RT200 programme was launched February this year to stimulate non-oil exports with a $200 billion Foreign Exchange income target in three to five years.

Emefiele as well explained that the initiative had been widely accepted and driven by the institutions that constitute the Bankers’ Committee.

This year’s retreat, he stated, provided an opportunity to review the progress of RT200, re-examine support for other government programmes to promote non-oil export and to identify specific implementable actions by the financial system to enhance Forex revenues.

Emefiele said: “We can no longer delay in resolving the structural issues inhibiting non-oil export receipts.

“We must strengthen the immunity and engender the resilience of our economy against exogenous shocks.”