- Foreign reserves hit $31.81bn
As the Senate heard yesterday the cheery news of Nigeria’ foreign reserves rise from $29.1billion to $31.89billion, it directed the Central Bank of Nigeria, CBN and the Nigeria Customs Service, NCS, to recover the N30billion waiver granted importers of rice, chicken and palm oil by the Goodluck Jonathan administration.
CBN Governor, Dr. Godwin Emefiele, told the Upper House that though the crash in the price of crude oil in the international market since last year, still had serious ripple effects on the Nigerian economy being a mono product, signs of recovery were already emerging.
He named one of the positive signs as the sudden rise in the nation’s foreign reserves from $29.1billion to $31.89billion within a space of five weeks.
At the closed-door session with the CBN governor and other management staff of the apex bank, Senate President, Bukola Saraki, directed them to liaise with the NCS towards recovering the N30billion waivers.
Saraki, who briefed newsmen after the meeting, said the money must be recovered from those who wrongly benefitted from a waiver that was in the first place, not needed, by glaringly contradicting government policy of import substitution.
He said: “CBN Governor, we thank you for the briefing. As you said, it is our belief, particularly that the recent policy you have taken on some selected items, chiefly key ones that has to do with agricultural products like rice, chicken, palm oil, and even in the areas of textiles.
“Our policy is that we, after listening to you, believe that they are steps taken in the right direction to try to help our economy in the area of import and export substitution. But one of the observations we also made was that the Central Bank alone cannot make it all work in this area.
“We must also show the big signals in things that we bring out the success of this policy, for example, you brought to our notice, the issue of the waivers on taxes and duties, especially on rice which is about N30bn that were granted to certain companies, this money must be paid back to the federal government.
“We have mentioned this to the governor of Central Bank. It will be our resolve too after we resume to get the Nigerian Customs to act on this. Even before that, we cannot be taking some of these needed actions and still allow some people to get away with bad things they have done in the past.
“We have told the governor of Central Bank as well, he should also go and collaborate with customs to ensure that this N30bn comes back to the government’s coffers, so that we will be seen to be doing things to make this policy successful”, he stressed.
He added that the issue of smuggling must also be tackled very drastically if policy of import substitution is to succeed.
According to Emefiele, “reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015.
“But today, I am delighted to note that with the strong efforts of President Muhammadu Buhari, to block all leakages as well as the Vigilant Demand Management Strategy of the Central Bank of Nigeria, we have seen our foreign exchange reserve begin a gradual recovery.
“As at the 7th of July, 2015, the reserves stood at $31.89 billion, a trend we find extremely gratifying,” he stressed.
Emefiele further informed that the CBN took a number of proactive actions to stem the tide of downward trend of the economy in the heat of the crash of oil price, which according to him, have helped a lot in stabilizing the economy now.
“Given our understanding that a fall in oil prices transitory but permanent, and that some speculative activities were ongoing in the foreign exchange market, the CBN took a number of proactive actions.
“These include, one, further typing of monetary policy, closure of the official foreign exchange window, review of operators’ net open position, placement of 72-hour limit on foreign exchange utilization by customers, introduction of a two-way other based quota system, introduction of a bank-around CBN tentative rate and bank on selective items from assets to foreign exchange.
“These policies have led to significant stabilization of exchange rate and an improvement on the market sentiment, having earlier traded at as high as N206 to a dollar.
“The naira to dollar exchange rate has appreciated and remained around N197 to a dollar in the interbank market in the last five months”, the CBN governor said.
He, however, called for diversification of the nation’s economy to prevent further threats to its growth and stability.
According to him, the nation’s economy should be transformed from being import dependent to a productive one.