CENTRAL BANK OF NIGERIA
PREPRESS RELEASESS RELEASE
Further Explanation On Selective Forex Restriction:
CBN Replies The Economist
The attention of the Central Bank of Nigeria (CBN) has been drawn to your recent
article titled “Toothpick Alert” in the print edition of The Economist Magazine of July
4th 2015. First, the article seems to ignore the fact that the exchange rate is simply a
price that is essentially determined by the forces of supply AND demand. The CBN
believes that the 48% decline in oil prices may not be transitory and made bold policy
changes including closure of the subsidized Official FX Window, which resulted in a
22% depreciation in the currency, the Naira. Because the Nigerian economy is heavily
dependent on imports and the exchange rate pass-through to inflation is high, we
believe that this adjustment is optimal at this time.
Contrary to the article’s argument, adjustments to a sharp decline in supply of US
Dollars cannot all be borne by an indeterminate depreciation, without considering
the full impact on the Nigerian economy. The demand side also has to be considered,
not just in response to the pressure on the Naira but as an opportunity to change the
economy’s structure, resuscitate local manufacturing, and expand job creation for
our citizens. Take rice imports, for example: why should we keep allocating scarce FX
to rice importers when vast amounts of paddy rice of comparable quality produced
by poor hardworking local farmers across the rice belts of Nigeria are wasted, and
farmers are falling deeper into poverty while we export their jobs and income to rice
producing countries? Few decades ago, Nigeria was one of the world’s largest
producers of palm oil but today we import nearly 600,000 Metric Tonnes while
Indonesia and Malaysia combine to export over 90 percent of global demand. Under
these circumstances, the CBN will do the little it can to protect the jobs and incomes
of local farmers, using some of the same principles Western Economies use to justify
the protection of their farmers through huge subsidies.
More also, if the article believes the CBN should adjust to reflect the current parallel
market rate, why was this suggestion not made in the week following the
inauguration of President Buhari when the same rate fell sharply to under N190 per
Dollar? The CBN does not panic and will not take desperate measures to satisfy few
misguided interests in the market.
The CBN believes that Nigeria cannot attain its full potentials by importing anything
and everything. For far too long, this trend has significantly weakened the operating
capacities of our industries, but now is a good opportunity to begin a reversal.
Although the article hastily derides this idea as lacking in economic foundations, it is
the same principles upon which many other countries do not allow importation of
certain products.
Furthermore, it appears condescending to suggest that the list of items seemed “to
have been drawn up by someone wandering around a house and a building site”. On
the contrary, items were only included after thorough and exhaustive discussions at
the highest policymaking body of the Bank, with the strategic national interest of
Nigeria.
Like other oil-exporting countries, Nigeria is grappling with its share of the aftermath
of the oil price decline. Despite this, our economic fundamentals remain strong.
Inflation is still within the CBN’s single-digit band, the exchange rate has stabilized
around N197 per US Dollar for the last 5 months, GDP expanded by 4 percent in the
first quarter of 2015, and 469,070 new jobs were created in the same quarter. With
ingenuity and productiveness, we believe that Nigerians will seize this opportunity
and use it for the greater good of the country. As we transition into a new
administration in Nigeria, we must continue to ensure policy stability at all times.
Ibrahim Mu’azu,
Director, Corporate Communications

Introvert sorry i took ur spot. CBN dey vex o. no pain no gain. lets watch how it goes

Nice one

I had read the article on The Economist (which by the way can be found here) and despite my misgivings about Emiefele (and there are a lot), I felt it was unnecessarily dismissive.
Now I can't claim to be the best Economist but our foreign reserves which were simply plowed through during the time of extreme Austerity need to be conserved and gradually increased.

I read every word of the reply.
It was brilliant. I hope the Director himself wrote it.

PS: I still don't rate Emiefele. This changes nothing.

...

oooo

warrior01:
Simple reply to the Oluwole economist. Please where is the nairaland dunce called Ngeneukwenu? Bomboclats!!!!!

Not enough to call someone a dunce!

Emefiele is as clueless as the Man who gave him the job.(Badhead and Badluck jonathan).
Any Tanoid that will quote me is also clueless

warrior01:
Simple reply to the Oluwole economist. Please where is the nairaland dunce called Ngeneukwenu? Bomboclats!!!!!

forget those apes. Produce of the same person being their mother and father.
A country (Nigeria) decides it doesn't want to buy tooth picks that it can make it's self from America but instead for it's self
and American comes out to insult Nigerians for the decision, and neither idiot can see what's motivating the American to be an assh*le.

They're of the class of Nigerians that can only 'solve' problems by screaming 'SACK' anyone and everyone but themselves.

The hawks has started eyeing the chicken. The "sophisticated" media vampires. The area which stated about half a million jobs on GEJ last months hurts the conspirators at North and South-left (in respect to Nigeria Map).

ednut1:
CENTRAL BANK OF NIGERIA
PREPRESS RELEASESS RELEASE
Further Explanation On Selective Forex Restriction:
CBN Replies The Economist
The attention of the Central Bank of Nigeria (CBN) has been drawn to your recent
article titled “Toothpick Alert” in the print edition of The Economist Magazine of July
4th 2015. First, the article seems to ignore the fact that the exchange rate is simply a
price that is essentially determined by the forces of supply AND demand. The CBN
believes that the 48% decline in oil prices may not be transitory and made bold policy
changes including closure of the subsidized Official FX Window, which resulted in a
22% depreciation in the currency, the Naira. Because the Nigerian economy is heavily
dependent on imports and the exchange rate pass-through to inflation is high, we
believe that this adjustment is optimal at this time.
Contrary to the article’s argument, adjustments to a sharp decline in supply of US
Dollars cannot all be borne by an indeterminate depreciation, without considering
the full impact on the Nigerian economy. The demand side also has to be considered,
not just in response to the pressure on the Naira but as an opportunity to change the
economy’s structure, resuscitate local manufacturing, and expand job creation for
our citizens. Take rice imports, for example: why should we keep allocating scarce FX
to rice importers when vast amounts of paddy rice of comparable quality produced
by poor hardworking local farmers across the rice belts of Nigeria are wasted, and
farmers are falling deeper into poverty while we export their jobs and income to rice
producing countries? Few decades ago, Nigeria was one of the world’s largest
producers of palm oil but today we import nearly 600,000 Metric Tonnes while
Indonesia and Malaysia combine to export over 90 percent of global demand. Under
these circumstances, the CBN will do the little it can to protect the jobs and incomes
of local farmers, using some of the same principles Western Economies use to justify
the protection of their farmers through huge subsidies.
More also, if the article believes the CBN should adjust to reflect the current parallel
market rate, why was this suggestion not made in the week following the
inauguration of President Buhari when the same rate fell sharply to under N190 per
Dollar? The CBN does not panic and will not take desperate measures to satisfy few
misguided interests in the market.
The CBN believes that Nigeria cannot attain its full potentials by importing anything
and everything. For far too long, this trend has significantly weakened the operating
capacities of our industries, but now is a good opportunity to begin a reversal.
Although the article hastily derides this idea as lacking in economic foundations, it is
the same principles upon which many other countries do not allow importation of
certain products.
Furthermore, it appears condescending to suggest that the list of items seemed “to
have been drawn up by someone wandering around a house and a building site”. On
the contrary, items were only included after thorough and exhaustive discussions at
the highest policymaking body of the Bank, with the strategic national interest of
Nigeria.
Like other oil-exporting countries, Nigeria is grappling with its share of the aftermath
of the oil price decline. Despite this, our economic fundamentals remain strong.
Inflation is still within the CBN’s single-digit band, the exchange rate has stabilized
around N197 per US Dollar for the last 5 months, GDP expanded by 4 percent in the
first quarter of 2015, and 469,070 new jobs were created in the same quarter. With
ingenuity and productiveness, we believe that Nigerians will seize this opportunity
and use it for the greater good of the country. As we transition into a new
administration in Nigeria, we must continue to ensure policy stability at all times.
Ibrahim Mu’azu,
Director, Corporate Communications

good reply!
where are those people who never say good about Nigeria.
ngene abi wet in be that name sef

The CBN shouldn't have dignified the Economist with a reply cos we know what they want for this country but another greece experience will not happen with Nigeria.

Those silly/fake economists on nairaland i.e 'hermaphrodite' & co. should take note too.

....300 is coming #Game of thrones#

Nice response to a patently condescending article by the Economist. It beats me hollow Why we easily give credence to theoretical economist doubling as journalists over and above proven professionals in our financial sector. Emefiele was appointed based on his empirical achievement as the MD of the no1 bank in Nigeria, we do not need some imperialist journalist , sitting in the comfort of their posh offices in London, offering us unsolicited advice on how to navigate through this economic meltdown

Where is that APCs Ngeneukwunkita? This piece needs to be violently shoved down her mischevious throat..

GudluckIBB:
Emefiele is as clueless as the Man who gave him the job.(Badhead and Badluck jonathan).
Any Tanoid that will quote me is also clueless

tell us more

good

Say no to white ass lickerzz!

[quote author=ednut1 post=35447457]Introvert sorry i took ur spot. CBN dey vex o. no pain no gain. lets watch how it goes[/quote yes,d pain is just for while, just a little this year, by next year everything wil come to normal

TheRealAdonye:
I had read the article on The Economist (which by the way can be found here) and despite my misgivings about Emiefele (and there are a lot), I felt it was unnecessarily dismissive.
Now I can't claim to be the best Economist but our foreign reserves which were simply plowed through during the time of extreme Austerity need to be conserved and gradually increased.

I read every word of the reply.
It was brilliant. I hope the Director himself wrote it.

PS: I still don't rate Emiefele. This changes nothing.

Lmao @ "I hope the Director himself wrote it."

Classic!

Adesiji77:

Lmao @ "I hope the Director himself wrote it."
Classic!

obviously he did not lol

Instead of the mumu to encourage investment in rice palm oil and toothpick production he is getting into shouting match with proper economists. And you are all here defending failure. Why is it that nigerians like enjoying suffering and smiling