Emefiele: With CBN’s Strong Policies, Growth to Accelerate in Q3

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Emefiele

Funke Olaode, Shola Oyeyipo and Martins Ifijeh in Washington DC

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has said the economy will record strong growth in the third quarter of this year.

Emefiele, who hosted Nigerians and friends of Nigerians to a banquet, tagged ‘Evening with the Governor of Central Bank of Nigeria,’ on the sideline of the ongoing IMF-World Bank Spring Meetings in Washington, DC USA, Friday night, expressed optimism that the policies of the CBN were yielding positive results for the economy.

Updating the international community about the prospect for the Nigerian economy as indicated by IMF, Emefiele said: “We feel delighted that yes, our growth number still looks fragile but things are look up. At today’s (Friday) session, it was admitted that growth has been weak from the last quarter of 2018 and will remain weak up till around the end of the first half of 2019, but by the third quarter of 2019 growth, will begin to accelerate again.

“It was also admitted at this session that those growth we will see, will be coming from emerging markets; and countries like India, China, like Brazil were mentioned and among them Nigeria, in Africa was mentioned as a country that will contribute to improvement to global growth in 2019.

“I felt very delighted that Nigeria was mentioned. What does that mean to me? It means that we are doing something right and that all we needed to do is that, with a lot of tenacity, we can even do better and one feel encouraged that you are on the right path and we can continue to do what we do.”
According to him, the recovery has been sustained for seven consecutive quarters and the pace of quarterly GDP growth has improved from 0.5 per cent during the second quarter of 2017 to 2.38 per cent during the fourth quarter of 2018.

“Admittedly, we would say that the growth rate looks fragile – it still looks low, if compared with the traditional growth number that Nigeria normally displays, averaging at that time between 5 – 6 and in some cases seven percent, but we are happy that at least for seven consecutive quarters we have shown positive growth numbers for Nigeria.

“As a result of all these policies, we have introduced, like I said earlier, inflation that had risen to 18.72 per cent in January 2017 currently stands 11.3 per cent as a result of the tightening measures that we have put in place at the CBN.

“In the area of exchange rate, since the establishment of investors and exporters’ window 2017, we have recorded close to $35billion in autonomous inflows through this window alone and as a result, exchange rate pressures eased considerably across all markets as the rate converged today at about 360 to a dollar and distortive premium almost today eliminated,” the CBN governor explained

Noting that the apex bank had to take some drastic decisions to bring Nigeria back from recession, some of which are producing the positive results, Emefiele stated that, “Yes, we admitted that it was a very painful period; but there was the need for our people to understand that the pain will be for a very short period and that in the long run, our people will benefit from it.

“Consequently, after about five consecutive quarters of uninterrupted GDP contractions beginning from the first quarters of 2016, eventually Nigeria was able to exit recession in second quarter of 2017.

“At some point, the rate at which the exchange rate was stable, people started to ask why, I asked them if they saw my hand anywhere. That is because the market players had developed confidence in the market; hence the rate is hovering between N357 to N361 to a dollar, which we feel at least, it is good for our system today. Now businesses can plan, people can then determine the price of their products and then know what and what should be imported or not.

“Our reserves had declined to $33billion, but with the implementation of all the tools mentioned above, our reserves sometime in 2018 was around $48 billion, and now we are able to provide dollars to who needed to go out of the country. Today, our reserves stand at about $45 billion, which we are happy about, and we feel with the confidence Nigeria currently enjoys, the reserves will go up before the close of this year.

“The government’s Anchor Borrowers scheme ensures that Nigeria emerges from being a net importer of foods such as rice, to becoming a major exporter of rice supplying key markets in neighboring countries. For instance, the data from the Thailand exporters association indicate that in 2012 about 1.2 million metric tonnes of rice was exported to Nigeria. However, in 2016, which is the first one year of the implementation of our anchor borrowers scheme, rice import to Nigeria had dropped to less than 1000 metric tonnes.”