BY EMEKA EJERE |
Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, at the weekend went a step further in his push to expedite economic recovery, with a piece of advice for indigenous and multinational firms to consider the opportunities that Nigeria offers and begin to set up their manufacturing lines in Nigeria.
According to the UNCTAD 2020 World Investment Report, FDI flows to Nigeria totalled USD 3,3 billion in 2019, showing a 48,5% decrease compared to the previous year (USD 6,4 billion in 2018) under the effects of austerity measures. The total stock of FDI was estimated at USD 98,6 billion in 2019. Nigeria’s unemployment rate as of the second quarter of 2020 is 27.1% meaning about 21.7 million Nigerians remain unemployed.
Emefiele, who gave the advice at the Local Manufacturing Contract Signing of Oral-B Toothpaste, between Procter and Gamble Nigeria and Colori Cosmetics in Lagos, noted that Nigeria should be the first port of destination for anybody that seeks investment in Africa.
“Given our market size and our population, we do believe that Nigeria offers significant advantages for multinational manufacturing firms that choose to invest in domesticating their production lines in Nigeria, he said.
“Not only do they have access to our large market, Nigeria can serve as a base for them to export goods to other markets in Africa.
” Our efforts at putting in policy measures to encourage improved production of made in Nigeria goods is driven out of the need to create jobs and wealth for our growing population.
“The impact of a manufacturing plant also goes beyond its immediate environment, as it also enables the growth of SMEs that work to meet the needs of the manufacturing plants and the staff.
“This is in addition to the skills transfer gains that could be made when our people are able to acquire knowledge on new technological skills.
“This path of supporting domestication of local production in Nigeria is imperative for us to enable growth that is inclusive and sustainable.
“We can’t afford to continue to rely on a model that encourages imports of goods and exports of jobs away from Nigeria, as the ramifications will be huge on our economy.”.
Recalling that the bank in April 2020 had set up a N1 trillion facility for the growth and expansion of manufacturing firms in Nigeria, Emefiele confirmed that N300billion has so far been disbursed to 76 manufacturing firms, which will boost local manufacturing across critical sectors over the next few years.
“Our efforts have aided the recovery of the manufacturing sector as reflected in the Purchasing Managers Index which shows that the index on manufacturing activities rose from a low of 42.4 points in May 2020 to 48.7 points in February 2021.
“While growth remains fragile, driving further growth of the economy would require that we continue to support more investments that will enable the growth of the manufacturing sector in Nigeria,” the apex bank governor said.
Emefiele has been at the forefront of the nation’s efforts to convince investors that Nigeria is one of the major investment destinations in the world, taking advantage of every forum to market Nigeria’s vast investment opportunities.
For instance, at an interactive session during the 2019 Spring Meetings of the International Monetary Fund (IMF)/World Bank in Washington DC, Emefiele said investors’ burgeoning confidence in the Nigerian economy brought more than $5bn investment into the country between February and March 2019 during the last elections, when they should have been in panic mode.
He assured foreign investors of safety of their investments, as a safe repatriation programme is in place should the need arise for it.
He said, “Nigeria is indeed open for business and the CBN and federal government welcome foreign investors. On CBN’s part, we will continue to do as much as possible, the good things that earned us commendations of IMF/World Bank at the Spring Meetings for maintaining foreign exchange and price stability, as well as containing inflation and building a robust foreign reserves,.”
Ahead of the Spring Meetings, Emefiele had while delivering a keynote address entitled: “Strengthening the Economic Recovery Process in Nigeria” at the 53rd Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN), reaffirmed the apex bank’s commitment to achieving growth and job creation through strong policies.
Assuring investors that their investments in the country would be protected by the monetary and fiscal authorities, Emefiele maintained that in spite of the impact of the recession that Nigeria experienced (2016-2017),the country’s economy remained the largest in Africa by the size of its GDP, with a very well diversified mix of opportunities across different sectors, such as ICT, Manufacturing, Solid Minerals, Trade and Agriculture.
“Your Central Bank today is more committed to creating wealth and putting in place strong policies for creating jobs for our growing youth population; your Central Bank today is ever more committed to promoting a more stable and resilient financial system,” he said.
While advising against hasty criticism of monetary policies, which he said were taken based on macroeconomic and geopolitical contexts, he assured that the CBN would always act in good faith, with the best available information and in cognizance of current economic conditions, to pursue price and financial system stability, support job creation on a massive scale and ensure a more inclusive growth in the economy.
He said that the combination of the restriction on 41 items along with other measures imposed by the fiscal and monetary authorities helped to boost local production of the items, thereby promoting the recovery that got Nigeria out of the 2016 recession..
He warned that any attempt to reverse the policy could negatively affect economic growth in the country, particularly as it relates to the push to diversify the Nigerian economy. He also disclosed that the CBN’s Economic Intelligence and Banking Supervision Departments would work closely with the Economic and Financial Crimes Commission (EFCC) to expose and sanction any bank, company or Foreign Exchange operator that colludes with individuals or companies to undermine the policy on 41 items.
On the success of the Anchor Borrowers’ Programme, Emefiele noted that the development finance intervention scheme had ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of rice, supplying key markets in neighbouring countries.
According to him, as at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, had so far benefitted from the programme, which had generated 2,502,675 jobs across the country.