Nigeria’s Monthly Import Bill Drops from $665.4m to $160.4m

Promises to sustain stability in the forex market
December 1, 2018


By Obinna Chima

The Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, yesterday revealed that the various initiatives aimed at encouraging domestic production, have resulted in Nigeria’s monthly import bill falling significantly from $665.4 million in January 2015, to $160.4 million as at October 2018, representing a drop by 75.9 per cent and an implied savings of over US$21 billion on food imports alone over that period.

He disclosed this in a keynote address he delivered at the 53rd Annual Bankers’ Dinner of the Chartered Institute of Bankers (CIBN) held in Lagos.



According to him, many entrepreneurs are now taking advantage of policies aimed at ramping local production to venture into the domestic production of the restricted items with remarkable successes and great positive impact on employment.

“The dramatic decline in our import bill and the increase in domestic production of these items attest to the efficacy of this policy.

“Most evident were the 97.3 percent cumulative reduction in monthly rice import bills, 99.6 percent in fish, 81.3 percent in milk, 63.7 per cent in sugar, and 60.5 percent in wheat.

“We are glad with the accomplishments recorded so far. Accordingly, this policy is expected to continue with vigour until the underlying imbalances within the Nigerian economy have been fully resolved.

“If we continue to support the growth of small holder farmers, as well as help to revive palm oil refineries, rice mills, cassava and tomato processing factories, you can only imagine the amount of wealth and jobs that will be created in the country.

“These could include new set of small holders farmers that will be engaged in productive activities; new logistics companies that will transport raw materials to factories, and finished goods to the market; new storage centres that will be built to store locally produced goods; additional growth for our banks and financial institutions as they will be able to provide financial services to support these new businesses; and finally, the millions of Nigerians that will be employed in factories to support processing of goods.

“If we turn a blind eye to the opportunities that are being created as a result of our policy on 41 items, we will be spelling doom for our nation. We can no longer afford to depend solely on imports given the size of our population, and the need to create jobs for our people.”

The CBN governor also stated that the bank would be collaborating with the Economic and Financial Crimes Commission (EFCC) to expose banks, importers or organisations that collude with corrupt individuals to flout its policy on the restriction of foreign exchange (forex) to 41 items.

The CBN had in July 2015, restricted 41 items, including vegetable oil, poultry products, toothpicks, cosmetics, plastic and rubber products, among others, from accessing foreign exchange from the interbank foreign exchange market.

Importers of the restricted items were asked to source their forex requirements from autonomous sources.

Emefiele pointed out that given the remarkable success that had been achieved in stimulating domestic production of goods such as rice, cassava and maize, as a result of the restrictions placed on access to forex for the 41 items, the central bank intends to vigorously ensure that the policy remains in place.

He also warned speculators in the forex market that they would lose their shirt, saying the central bank has enough war chest to sustain the stability in the forex market.

According to him, the central bank would continue to take measures to ensure stability in the forex market.

He said additional efforts would be made to block any attempts by unscrupulous parties (both individuals and corporates) that intend to find other avenues of accessing forex, in order to import these items into Nigeria.

“The CBN’s Economic intelligence and Banking Supervision Departments will work very closely with the EFCC to expose and sanction any bank, company and or its directors or forex operator who colludes with unscrupulous individuals/companies to undermine the policy on 41 items.

“Such sanctions will include, but not limited to prohibiting all the banks in Nigeria from maintaining any bank accounts for any such institutions or persons in Nigeria.

“If you are caught as an individual or a company, we are saying that, that bank, that company and the individuals, that the central bank would prohibit all the Nigerian banks at same time, from maintaining any bank account for you,” he warned.

In his outlook for 2019, Emefiele predicted that monetary policy stance would remain judicious, research driven, adequate and supportive of the real economy subject to underlying fundamentals.

He pointed out that the current tight stance was expected to continue in the near-term, especially in view of rising inflation expectations and exchange market pressures.

“Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, the CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilisation.

“With favourable oil price developments and continued efforts at driving indigenous production in high-impact real sector activities, especially agriculture and manufacturing, Gross Domestic Product (GDP) is expected to pick-up in the remaining two quarters of 2018.

“This will be buoyed by the anticipated budgetary and electioneering spending in the near-term. From 1.5 per cent in quarter two of 2018, growth is projected to quicken to 1.7 per cent in quarter three and 1.9 by the fourth quarter.

“Inflation expectations are rising on the backdrop of anticipated politically-related liquidity injections. For the rest of 2018 and towards mid-2019, Nigeria’s rate of inflation is projected to rise slightly to 11.4 percent and then moderate “Though the CBN has so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets are expected to continue to exert considerable pressure on market rates.

“This pressure could be amplified by the forthcoming elections, especially as the political market place heats up. Notwithstanding these pressures, the CBN is determined to maintain its stable exchange policy stance over the next few months given the relatively high level of reserves.

“Gross stability is projected in the FX market given increased oil related inflows and contained import bill.

“I will like to make it categorically clear that sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves.”

He pointed out that the country’s overdependence on crude oil for forex revenue also meant that shocks in the oil market would be transmitted entirely to the economy via the forex markets.

“Based on our internal research conducted at the Central Bank of Nigeria, there is strong support that the recovery of our economy from the recession may have been much weaker or even negative, without the implementation of the restriction on 41 items.

“Our research supports the conclusion that the combination of the restriction on 41 items along with other measures imposed by the fiscal and monetary authorities has helped to promote the recovery.

“In fact, recommendations are being made to the CBN that the list of 41 items be expanded to include other additional items that can be locally produced.”

https://www.thisdaylive.com/index.php/2018/12/01/emefiele-nigerias-monthly-import-bill-drops-from-665-4m-to-160-4m-promises-to-sustain-stability-in-the-forex-market/

'“In fact, recommendations are being made to the CBN that the list of 41 items be expanded to include other additional items that can be locally produced.”

- economic crises looms especially unemployment levels

- You can continue to support the APC party in the face of anticipated impoverishment in 2019

.....

Emiefele is actually doing a great job we need to stop being an import dependent country but a manufacturing one . At least let's stop importing food product

Good or Bad?

Election is coming, more of this type of news are expected to sell this administration.

There are many reasons for decline in import Bill. One is that disposable income is at its lowest ebb since 2015.

You cannot spend money that you don't have. This is error of assumption to say that what we stopped importing are all being produced locally. Consumption declined. Tell Emefiele that if local production increased one indicator should have been JOB CREATION but there was actual JOB LOSSES. There are 4 factors of production of which LABOUR is one.

CAPITAL also reduced between 2015 and 2018. Foreign capital providers left the country in droves and Nigeria couldn't attract new ones leading to increased borrowing to fund the govt. More businesses closed shop. More Nigerians were thrown into poverty more than ELEVEN million since 2015.

I don't blame Emefiele he has to protect his job.

This indeed is a sad news for Igbo Christians .

This is great News.

Nigeria shall be great!!!!

Before Buhari, Nigeria had no economy. Situation whereby you sell oil and use the proceed to import rice, toothpick, including Garri from India. Is that one an economy? An unproductive, rent seeking economy. What happens when the price of oil falls like it did in 2016?

See what we saw that some slowpoke could not see that Buhari is the man for the job

For those that do not know the implication of this, it means that due to the policy if the government, Nigeria has reduced importation of goods which in turn is expected to improve local production. This is a step towards self sufficiency and development of local industries. The long term benefit of this is industrialization.

It would take some time but Nigeria would definitely be fixed.

"It took Mahathir Muhammad 22 years (1981-2003) to fix Malaysia.

It took Lee Kuan Yew 8 consecutive terms in office for 30 years (1959-1990) to fix Singapore.

It took Jerry Rawlings 26 years (1981-2002) to fix Ghana.

BUT THEY WANT NIGERIA TO BE MIRACULOUSLY FIXED IN 4 YEARS."

Fellow Nigerians, Believe me when i say as a Northerner if i want to be Tribalistic then i will vote for Atiku. There is no way in hell that man wouldn't stay for two terms and even beyond if he can. That would ultimately mean 12 years of power for Northerners including that of Buhari. But at the end who does that benefits the most if not only the northern elites and a few southern bootlickers?They just want to return Nigeria back to the status quo and all these news of restructuring and economy is just smokescreen. The economy is obviously bad but the red flag have been there for a long time(I mean what do you expects from an oil based economy?), Don't let thieves deceive you and use this trying times to justify their evil course. If only we can see alternates future four years from now under every presidential candidate we will ultimately all choose Buhari. Don't let our current trial cause by decades of lack of vision in the first place blind you to true effort of leaders trying to lift us out of this predicament. Thank you!

Buhari, there is hunger in the land

Kenekingisback:
'“In fact, recommendations are being made to the CBN that the list of 41 items be expanded to include other additional items that can be locally produced.”

- economic crises looms especially unemployment levels

- You can continue to support the APC party in the face of anticipated impoverishment in 2019

What is this one saying...?.. isn't this a good news for the manufacturing sector ? We are saving our hard currency, but your hate for Buharis govt won't allow you to see it..

Really bad!

Given that Nigeria import everything and even the rice the govt claim will reduce in importation was trashed by a global report, then people are so broke and can't afford to import.

Those days, jumia trucks are always at the office delivering goods, Nipost thronged with log of Aliexpress packages to deliver. Now it is so minimal.

Even Konga had to get sold, Jumia is dying even local purchases has reduced say less Intl.

Simply means we are managing the onces we have for now, until Buhari is removed from office.

Congratulation for the first time!

The monthly imports dropped because there is no money and not because of any useless policy as claimed. Except if they mean to tell us that businesses closing and people getting retrenched is because of their good economic policies.

That's a good sign

frankmoney:
Emiefele is actually doing a great job we need to stop being an import dependent country but a manufacturing one . At least let's stop importing food product

Even Switzerland import more than they export.. Think abt it!

@deji17

Thanks for sharing

Well, the economists here would know better, but this seems to be one side of the story

It sounds to me like the guy who has mastered ways of cutting his expenses to fit his present income

That doesn't necessarily mean his income has increased

Or that he will apply the money saved to more productive ventures

Still he deserves some accolades even as we wait for him to tell us the other part of the story...

$160 million?... If this is true, then it's the best news ever for Nigeria's import dependent economy; it will only be a matter of yime before the dollar rate inevitably drops. But then, something doesnt just seem to add up here. How much does Nigeria spend importing petroleum products alone? Except I really dont understand what this figure means, but Nigeria at the moment even pays more than $160 million per month for just fuel subsidy alone.

DOG AND BABOON REPUBLIC

Watch how children of anger and hate will put their lives on the line to make sure they counter this from CBN.

Wait ooo does it mean these children of anger and hate from East just don't like good things and news about Nigeria.

Are these children of hate and anger vampires because the news that gives them joy surprises good people of the world.

They like news like Boko Haram kills soldiers, Boko Haram bombs Borno, Nigeria seizes to exist and Nigeria is the headquarter of killings.

Children of anger and hate from the East repent before it's too late.

[quote author=lonelydora post=73492593]Buhari, there is hunger in the land [/quote

No food for the lazy.

A paint plastic container of garri is now N250.

Go drink garri.

Why does this only reflect on Paper? We are yet to see the actual results of this baddarash.

Import reduced simply because custom duty was increased up to %60. There is no improvement to local production in any sector, Not even in the Oil sector controlled by the Government.

If the Government are paying huge sums for subsidy daily, Why do they think importers can make profit after paying up to %60 on their imported goods.? Of course they will have to stop importation and find something else to do. Do not use that as an avenue to lie about increasing local production when in reality the decline in Imporation is = Job Loss being experienced nation wide

new2012:


Even Switzerland import more than they export.. Think abt it!

well I don't know about that , but we should also check what they are importing , Nigeria imports irrelevant things , read a topic where the customs intercepted a container filled with soup that was imported !! You can imagine importing soup , rice , toothpick etc when we can easily produce this things and export thereby strengthen our currency