Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefiele
By Babajide Komolafe
Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele Wednesday said that Nigeria should take a cue from the ongoing global trade way by adopting policies to protect the local economy.
Emefiele made this call while delivering the keynote address at the annual CBN seminar for finance correspondents and business editors in Lokoja, Kogi State.
Citing the example of the foreign exchange restriction placed on 41 items by the CBN, Emefiele stressed that selective protection is necessary to address the challenges confronting the nation’s economy.
He said: “In today’s world, countries have used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries. In other words, should Nigeria with insatiable taste for foreign goods to the detriment of the domestic economic realities( unemployment and imported inflation) throw its borders open to indiscriminate importation of goods and services?
“This was the prevailing condition in Nigeria before the introduction of restriction of official foreign exchange for the importation of 41 items.
It was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting GDP-recession and an embarrassing rise in the level of unemployment confronting the economy.
“The implementation of the 41 items, in addition to the other complementary macroeconomic policies, no doubt, was effective in lifting the Nigerian economy out of recession.
“For example, the real Gross Domestic Product (GDP) grew by 1.40 per cent in the third quarter of 2017, up from 0.72 per cent, and contraction of 0.91 per cent in the second and first quarter of 2017, respectively. Also, there has been improved reserve accretion to the country’s reserve.
“Given these salutary effects on the economy; it can be argued that the stance of Classical economists argued that trade protectionism notwithstanding, to override the utility of selective protection in form of the 41 items to resolve the challenges facing the economy can hardly be overemphasized.
“Pragmatic economic nationalism therefore, would ordinarily vote in favour of protecting the domestic economy, as long as it does not infringe upon the tenets of “beggar-thy-neighbor” policies.”