Mr Godwin Emefiele, the Governor, Central Bank of Nigeria on Friday disclosed that the country loses $1.3bn forex inflows monthly due to the fall in global prices of crude oil.
Speaking at the annual Bankers’ Dinner organized by the Institute of Bankers of Nigeria, he disclosed that the effect of the crash in crude oil price has brought about paucity of funds which also affected the monthly allocation to the state governments from the federal purse.
“Given the sharp fall in oil prices, federation allocation to states have dropped by an average of about N2bn for each month
“Similarly, average inflows of foreign exchange into the CBN have fallen to by about $1.3bn per month; this has led to a sharp decline in our forex reserves from as high as $37bn as at June 2014 to $30bn” Emefiele said.
The Governor of Central Bank urged Nigerians to be discipline and avoid the urge for the consumption of foreign goods as that would adversely affects the falling foreign exchange reserves.
Emefiele stated that the apex bank will begin a campaign which will encourage consumption of goods produced in the country. He hinges his decision on the rise on import in September, according to him, Nigeria’s import rose to N917bn in September and may likely hit N1.2tr in December.
He said, “Nigeria cannot continue on this path of importing everything and anything. Indeed, it is both unacceptable and unsustainable and that was the reason we decided at Central Bank to prohibit items we can produce here from accessing forex from Central Bank.
“The last time we had oil prices at $50 per barrel for an extended period of time was in 2005 and our total import bill for that year was only N148bn. Yet, in the first nine months of this year, our total import bill has already risen to N917bn, and by logical extension, it is heading towards N1.2tn by the end of the year.
“The CBN will in due course embark on a national campaign called PAVE which stands for: Produce Locally, Add Value and Export. We definitely cannot survive as a people by importing everything and anything.’’
“I am not unaware of the short-term pains associated with our policy decisions, but I urge you all to understand that this time is different.
“This is an opportunity for us to look inwards, diversify our economy away from oil, produce locally and create jobs for our unemployed youths. Countries that successfully managed during the period of drop in crude prices are those who embraced the concept of producing and consuming locally made goods,” Emefiele added.
