Godwin Emefiele, CBN Governor

By Godwin Emefile

As many people are now aware, the outbreak of
the Novel Coronavirus Disease (COVID-19) in
China rapidly permeated and profoundly changed the world. While this crisis is first and foremost a public health issue, which has claimed the lives of over 123,600 people worldwide, and counting, the economic damages are unprecedented on several fronts: Crude oil prices declined dramatically to as low as US$17
per barrel by the end of March, even before applying the discounts, many oil exporters are offering; Stock valuations for the NSE-ASI, Nikkei, Dow Jones and FTSE-100 declined by an
average of 23.8 per cent between January and March 2020; Global airlines have lost about US$252 billion in revenues and across the broad range of industries from hospitality to services, the pain is growing. These outcomes have expectedly
thrown the global economy into a recession, the
depth and duration of which is currently difficult to
fathom. In fact, the International Monetary Fund
(IMF) predicts that the global economy would decline by 3 per cent this year.
Around the world, countries have moved away
from multilateralism and responded by fighting for
themselves with several measures to protect their
own people and economies, regardless of the
spillover effects on the rest of the world. According
to the World Customs Organization, a total of 32
countries and territories adopted stringent and
immediate export restrictions on critical medical
supplies and drugs that were specifically meant to
respond to COVID-19. As of 10 April 2020, an
updated count of total export restrictions by the
Global Trade Alert Team at the University of St.
Gallen, Switzerland suggests a total of 102
restrictions by 75 countries.
On 4 March 2020, Germany announced an export
ban that applied to all sorts of medical protection
gear including breathing masks, medical gloves
and protective suits. Around the same time,
President Macron announced that France will
requisition all face masks produced in the country,
a de facto export ban. Between 8 February 2020
and 6 April 2020, India released eight (8) different
export notifications banning several drugs and
medical supplies including hydroxychloroquine,
ventilators, personal protections masks, oxygen
therapy apparatus, and breathing devices. On 3
April 2020, the Trump administration invoked the
war-era US Defense Production Act to stop major
US mask manufacturer, 3M, from exporting N95
respirator masks to Canada and Latin America.
Fears of a long global recession have also led to
worries about unprecedented global food
insecurity, with concerns that agricultural
production may be dislocated by containment
measures that constrain workers from planting,
managing and harvesting critical crops. Rather
than seek cooperative and global solutions,
several countries have resorted to export
restrictions of critical agricultural produce.
According to the International Food Policy
Research Institute (IFPRI), about 37 countries
have enacted various forms of food export
restrictions in response to COVID-19, even in
countries where average production exceeds
domestic consumption.
For example, Viet Nam, the world’s third-largest
exporter of rice suspended granting rice export
certificates until the country “reviews domestic
inventories”. Russia, the world’s largest wheat
exporter announced a ten-day ban on the export
of buckwheat and rice due to concerns over panic
buying in local supermarkets.
What if these restrictions become the new normal?
What if the COVID-19 pandemic continues in a
second wave or another pandemic occurs in which
all borders are shut and food imports are
significantly restricted? What if we cannot seek
medical care outside Nigeria and must rely on
local hospitals and medical professionals? For
how long shall we continue to rely on the world for
anything and everything at every time?
Although these developments are troubling, they
present a clear opportunity to re-echo a persistent
message the Central Bank of Nigeria (CBN) has
been sending for a long time, and at this time even
more urgently so: We must look inwards as a
nation and guarantee food security, high quality
and affordable healthcare, and cutting-edge
education for our people. For a country of over 200
million people, and projected to be about 450
million in a few decades, we can no longer ignore
repeated warnings about the dangers that lie
ahead if we do not begin to depend largely on
what we produce locally. The security and wellbeing of our nation are contingent on building a well=diversified and inclusive productive economy.
When I became Governor of the Central Bank in
June 2014, imports of rice, fish, wheat and sugar
alone consumed about N1.3 trillion worth of
foreign exchange from the Bank. My immediate
the question was: can we not produce these
ourselves? After all, only a few decades ago,
Nigeria was one of the world’s largest producers
and exporters of many agricultural products like
palm oil, cocoa and groundnuts. Today, we import
nearly 600,000 metric tonnes of palm oil, whilst
Indonesia and Malaysia, two countries that were
far behind us in this crop, now combine to export
over 90 per cent of global demand. In 2017,
Indonesia earned US$12.6 billion from its oil and
gas sector but US$18.4 billion in from palm oil. I
believe that this pandemic and the immediate
the response of many of our trading partners suggest
it is now more critical than ever that we take back
control; not just control over our economy, but also
of our destiny and our future.
In line with the vision of President Muhammadu
Buhari, the CBN has indeed created several
lending programmes and provided hundreds of
billions to smallholder farmers and industrial
processors in several key agricultural produce.
These policies are aimed at positioning Nigeria to
become a self-sufficient food producer, creating
millions of jobs, supplying key markets across the
country and dampening the effects of exchange
rate movements on local prices.
This philosophy has been a consistent theme of
the CBN’s policies over the last few years. At the
2016 Annual Bankers’ Dinner, I challenged the
bankers that we needed to take decisive actions to
fundamentally transform the structure of our
economy. Throughout that speech, I talked about
the damaging effects of Nigeria’s unsustainable
the propensity to import, and opined that it was high
time we looked inwards and stopped using hard-earned foreign exchange (FX) to import items that
we should produce locally. This determination,
therefore, formed the bedrock of the Bank’s policy,
which restricts access to FX for importers of many
items. These sentiments were re-echoed at the
2017 edition of the same Bankers’ Dinner with
specific examples of several companies that have
benefited significantly from this policy of self-sufficiency. With President Buhari’s full support, we
have continued to refine this policy to ensure that
the best interest of Nigeria is served.
Many times, the Bank has been accused of
promoting protectionist policies. My answer has
always been that leaders are first and
foremost accountable to their citizens. If the
vagaries of international trade threaten their
wellbeing, leaders have to react by compelling
some change in patterns of trade to the greater
good of their citizens.
That is why in response to COVID-19, we are
strengthening the Nigerian economy by providing
a combined stimulus package of about N3.5 trillion
in targeted measures to households, businesses,
manufacturers and healthcare providers. These
measures are deliberately designed to both
support the Federal Government’s immediate fight
against COVID-19, but also to build a more
resilient, more self-reliant Nigerian economy.
We do not know what the world will look like after
this pandemic. Countries may continue to look
inwards and globalization, as we know it today, may
be dead for a generation. Therefore, as a nation,
we cannot afford to continue relying on the world
for our food, education and healthcare. The time
has come to fully transform Nigeria into a modern,
a sophisticated and inclusive economy that is self-sufficient, rewards the hardworking, protects the
poor and vulnerable, and can compete
internationally across a range of strategic sectors.
To achieve this goal, we must begin
immediately to support the Federal Government
1) Build a base of high-quality infrastructure,
including reliable power that can engender
industrial activity;
2) Support both smallholder and large scale
agriculture production in select staple and cash
3) Create an ecosystem of factories, storages, and
logistics companies that move raw materials for
value-added production, and finished goods to
4) Use our fiscal priorities to create a robust
an educational system that enables critical thinking
and creativity, which would better prepare our
children for the world of tomorrow;
5) Develop a healthcare system that is trusted to
keep all Nigerians healthy, irrespective of social
6) Facilitate access to cheap and long-term credit
for Small and Medium-Scale Enterprises (SMEs)
and large corporates;
7) Develop and strengthen pro-poor policies that
bring financial services and security to the poor
and the vulnerable; and
8) Expedite the development of venture capitalists
for nurturing new ideas and engendering Nigerian
businesses to compete globally.
India is in a position to ban exports because it is
producing critical drugs and medical supplies that the rest of the world needs. It also has
companies that are global champions, and even
merging with or acquiring peers in advanced
nations. Why should this be out of our reach? We
have the companies and the manpower. Some of
the best brains in the world from the Americas to
Europe and from Asia to Africa are Nigerians;
driving global innovations in all fields. Nigerians
are successful everywhere and are already one of
the most sought after immigrant groups in the
United States. Now is the time to seize this
opportunity and create an environment that
empowers our people to thrive within our
To this end, the Central Bank has developed a
Policy Response Timeline to guide our crises
management and the orderly reboot of the
Nigerian economy.
Immediate-Term Policies (0-3 Months)
Because this crisis is an exogenous
one thrust upon us without much warning, this
phase reflects the government’s efforts at
containment and mitigation. Although global cases
are heading towards two million with over 123, 600
deaths as of 14 April 2020, we now have 343
cases, of which there have been 91 recoveries
and sadly 10 deaths. With President Buhari’s
continuing strong leadership, Nigeria can now test
1,500 persons per day in twelve (12) Molecular
Test Laboratories. We believe that his strong
leadership to impose early travel restrictions,
lockdown, social distancing, and other measures
have been greatly effective in curbing the spread
of the disease. More so, the Presidential Task
Force on COVID-19 and the Nigeria Centre for
Disease Control (NCDC) has helped the country
stay ahead of the curve with increased testing
capacity, provision of better-equipped isolation
centres, and effective contact tracing. Within this
milieu, the CBN has responded in several ways,
first by supporting hospitals and pharmaceutical
industry with low-interest loans to immediately deal
with the public health crises; then by working with
the private sector Coalition Against COVID
(CACOVID) to support the Presidential Task Force
on COVID-1 9 across its response,
while mobilizing palliatives for the poor
and vulnerable. Under this Immediate-Term
Response, we have activated the following: 1)
Ensure financial system stability by granting
regulatory forbearance to banks to restructure
terms of facilities in affected sectors; 2) Trigger
banks and other financial institutions to roll-out
business continuity processes to ensure that
banking services are delivered in a safe social-
distance regime for all customers and bankers; 3)
Grant additional moratorium of 1 year on CBN
intervention facilities; 4) Reduce interest rates on
intervention facilities from 9 per cent to 5 per cent;
5) Create N50 billion targeted credit facility for
affected households and SMEs; 6) Strengthen the
Loan-Deposit Ratio (LDR) policy, which is
encouraging significant extra lending from banks;
7) Improve FX supply to the CBN by directing all
oil companies (international and domestic) and all
related companies (oil service) to sell FX to CBN
and no longer to the NNPC; 8) Provide additional
N100b intervention in healthcare loans to
pharmaceutical companies, healthcare
practitioners intending to expand/build capacity; 9)
Provide N1 trillion in loans to boost local
manufacturing and production across critical
sectors; and 10) Engender financial inclusion by
ensuring the poor and vulnerable are able, by all
means necessary, through banks, microfinance,
community and non-bank financial institutions, to
access financial services to meet their basic
Short-Term Policy Priorities (0 – 12 months)
As soon as President Muhammadu Buhari and the
Health authorities determine our Coronavirus
Transmission Curve is flattening and many of the
ongoing restrictions are eased, this will be the
phase for repositioning the Nigerian economic
space. As part of the lessons from the current
pandemic, we must ensure that that our value-added sector, the manufacturing industry is
strengthened. Accordingly, the CBN will pursue the
following policies in this phase: 1) Reinvigorate our
financial support for the manufacturing sector by
expanding the intervention all through its value-chain. In most cases, we will ensure that primary
products sourced locally provide essential raw
material for the manufacturing sector except where
they are only available overseas; 2) With the
support of the Federal Government, the CBN will
embark on a project to get banks and private
equity firms to finance homegrown and sustainable
healthcare services that will help to reverse
medical tourism out of Nigeria. By offering long-term financing for the entire healthcare value-chain
(including medicine, pharmaceuticals, and critical
care), banks will work with healthcare providers to
consolidate on the current efforts to rebuild our
medical facilities to ensure Nigeria has
world-class affordable hospitals for the people of
Nigeria and those wishing to visit Nigeria for
treatment; 3) The CBN will promote the
establishment of InfraCo Plc, a world-class
infrastructure development vehicle, wholly focused
on Nigeria, with combined debt and equity take-off
capital of N15 trillion, and managed by an
independent infrastructure fund manager. This
the fund will be utilized to support the Federal Government in building the transport infrastructure
required to move agriculture products to
processors, raw materials to factories, and finished
goods to markets, as envisaged at the CBN Going
for Growth Roundtable in March 2020; and
4) Continue to prioritize the provision of FX for the
importation of machinery and critical raw materials
needed to drive a self-sufficient Nigerian economy.
Medium-Term Policy Priorities (0 -3 Years):
Once the world returns to some new normal
having tamed COVID-19 by a combination
of vaccines and social distancing, and the Nigerian
economy reopens fully for business, we will act
quickly to enable faster recovery of the economy
by targeted measures towards particular sectors
that are able to support mass employment and
wealth creation in the country. We will do so by
focusing on four main areas, namely, light
manufacturing, affordable housing, renewable
energy, and cutting-edge research.
In manufacturing, for example, it is pertinent to
note that Nigeria’s gross fixed capital formation is
currently estimated at N24.55 trillion made up
residential and non-residential properties,
machinery and equipment, transport equipment,
land improvement, research and development,
and breeding stocks. Of this estimated value,
machinery and equipment, which are the main
inputs into economic production, are currently
valued at only N2.61 trillion. To pursue a
substantial economic renewal, including
replacement of at least 25 per cent of the existing
machinery and equipment for enhanced local
production, we estimate at least N662 billion worth
of investments to acquire hi-tech machinery and
equipment. Therefore, the CBN will consider an
the initial intervention of N500 billion over the medium
the term, specifically targeted at manufacturing firms
to procure state-of-the-art machinery and
equipment and automated manufacturing models
that would fast-track local production and
economic rejuvenation, as well as support
increased patronage of locally processed products
such as cement, steel, iron rods, and doors,
amongst several other products. The recent
private sector investments in cement production
using enhanced technology and automated
manufacturing models is a good example of the
kind of economic renewal we will be pursuing in
this phase. We will develop a thorough screening
process and stringent criteria for equipment types
that would qualify for funding under this phase.
In order to boost job creation, household incomes
and economic growth, we will focus our attention
on bridging the housing deficit in the country by
facilitating government intervention in three critical
areas: housing development, mortgage finance,
and institutional capacity. We will pursue the
creation of a fund that will target housing
construction for developers that provide evidence
of profiled off-takers with the financial capacity to
repay. The current identification framework in the
banking sector using the bank verification number
(BVN) will be used to verify the information
provided by the off-takers before the developer
can access the funds. We will consider ways to
assist the Mortgage Finance sub-sector as well as
build capacity at the State levels for their land
administration agencies to process and issue land
titles promptly, implement investment friendly
foreclosure laws and reduce the cost of land
documentation, as these have remained major
inhibiting factors in the provision of affordable
housing in the country.
Over the next 3 years, we will also support the
financing of environmentally friendly energy
production, as this has a tangential long-term
health benefits. We will look at efforts to drive
innovation and research in every sector, through
our universities, research institutions, creative
industry initiatives, and all other media of novelty
and inventions.
In conclusion, I believe we must now envision and
work toward a Nigeria with the cutting edge
medical facilities to provide world-class care to the
sick and vulnerable, enable our universities and
research institutions to provide the requisite
education and training that is required to keep
these ecosystems functioning sustainably and
efficiently, and millions of Nigerians employed in
meaningful and well-paying jobs. This is the
Nigeria that we must aspire to build.
COVID-19 may have plunged us into a crisis of
unprecedented proportions. But, as Winston
Churchill once admonished, we must never let a
crisis go to waste.
Godwin Emefiele, is Governor of the Central Bank of


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