Nigeria’s economy, a volcano waiting to erupt, says CBN
THE Central Bank of Nigeria (CBN) has described the nation’s economy as “a volcano waiting to erupt” had the foreign exchange pressure been left unchecked.
Its Director of Monetary Policy Department, Moses Tule, disclosed this yesterday in Calabar, Cross River State, during the opening session of the two-day seminar for finance correspondents and business editors.
Tule, in a lecture titled, “Crude Oil Volatility: Implications for External Reserves and Exchange Rate Management in Nigeria,” said the recent policy on foreign exchange was an edge against the imminent disaster to the country’s economy.
“A rapid fall in oil prices threatens Nigeria’s macro-economic stability because foreign exchange earnings, government revenue and domestic money supply are largely dependent on the receipts from crude oil exports,” he said.
He lamented that the economy is dwindling, even when Nigerians are overly concerned with the monetary policy, which tweak the interest and exchange rates while ignoring the fiscal policy.
According to him, the economy cannot grow without balancing both sides, as the tax system can be used to raise the required fund to balance the budget, which the government has ignored, focusing on oil.
Tule regretted that over the years, Nigerians were less concerned about what happened to the implementation of budget items, which are major source of distortion to the economy. He advised the nation to adopt the Ethiopia model of industrialisation and diversify the economy.
Meanwhile, an economist and Chief Executive Officer of Financial Derivatives Company (FDC), Bismark Rewane, has restated his call for fuel subsidy removal as panacea for the desired economic growth. He contented that with subsidy constituting 15 per cent of the nation’s import bills, the current policy modification by economy planners may not yield the desired result.
This apparently followed President Muhammadu Buhari’s resolve to sustain oil subsidy, stating that the argument for its removal were not convincing and deep enough.
Speaking on the “Evolution of the foreign exchange market in Nigeria and the way forward,” Bismark warned that “if fuel subsidy is not dealt with, policy modification will not yield desired results. Remove subsidy and aberrational demand pressure disappears.”
Nigeria being an oil-dependent economy, he said, the behaviour of exchange mirrors the movement of oil prices at the international market, and the nation faces a dual problem of resource and management.
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4 Comments
Build enough refineries, we refine our own crude, it stops the hard currency flight, the naira will stop falling and we will have stable economy, and with enough refinery we can even export refined petroleum. And generate revenue for the country.
THIS IS NOT HAPPENING BECAUSE SOME OF US NIGERIANS ARE TRAITORS AND OUR OWN ENEMIES.
MR EMFIELE, STOP BOASTING. YOU ARE TOTALLY DISHONEST IN YOUR CLAIMS.
YOU STILL REMAIN A TRUE SYMBOL OF WEAK NAIRA AND NAIRA DEVALUATION. YOU MADE NO CONTRIBUTION WHATEVER, TO THE VERY RECENT RISING OF RESERVE FUNDS THANKS TO BUHARI FOR PLUGGING IN THE LOOP HOLES IN THE NNPC.
REMEMBER, YOU ARE STILL DUE FOR SACKING BY PRESIDENT BUHARI FOR YOUR DISMAL KNOWLEDGE AS AN ECONOMIST AS TO HOW TO RUN THE AFFAIRS OF THE CENTRAL BANK. FURTHERMORE, YOUR BVN EXERCISE IN LONDON, NEW YORK IS A LARGE SCALE FRAUD CHARGING BANK CUSTOMERS 30 POUNDS FOR BVN ENROLLMENT . EMEFIELE, THIS GROSSLY IRRESPONSIBLE BUT WHICH I VERY MUCH EXPECT FROM THE QUALITY OF A PERSON LIKE YOU- IGNORANT AND ILLITERATE VILLAGE COMMERCIAL BANKER OUT TO MAXIMISE PROFITS AT THE FINANCIAL LOSSES AND AT GREAT INCONVENIENCE TO BANK CUSTOMERS.
CUSTOMERS HAVE BEEN FORCED TO VISIT THE OIS OFFICE IN LONON AND ELSEWHERE THREE TIMES – FIRST TIME, TO COLLECT FORMS, SECOND TIME, FOR FINGER PRINTING AND THEN THIRD TIME TO COLLECT THEIR BVN NUMBERS WHICH MAY NOT EVEN BE AVAILABLE WHEN THEY REACH THERE! OIC OFFICE IN LONDON IS MOSTLY INACCESSIBLE BY PHONE OR E-MAIL. YOU CAN SPEND THE WHOLE DAY PHONING THEM THEY ARE JUST NOT THERE TO PICK UP THE PHONE.
FURTHERMORE, FOR THIS BVN EXERCISE, NIGERIANS HAVE TRAVELED LONG DISTANCES AND SPENT HUNDREDS OF POUNDS ON THESE THREE TRIPS TO LONDON WITH MONEY LOST FROM 3-DAY OFF WORK FOR A SUPPOSEDLY FREE EXERCISE AS ANNOUNCED BY THE NIGERIAN BANKS. UNDER THE CIRCUMSTANCE, THE CENTRAL BANK OF NIGERIA HEADED BY THE MOST INCOMPETENT AND ECONOMIC ILLITERATE CENTRAL BANK GOVERNOR EMEFIELE WHO IS QUITE UNMINDFUL AND IGNORANT OF THE TROUBLE BEING TAKEN BY NIGERIANS IN DIASPORA, TO REGISTER FOR BVN IN LONDON AND ELSEWHERE SHOULD REFUND £30 AS THE UNCALLED FOR BVN FEE AND A MINIMUM AMOUNT OF £500 TO EVERY CUSTOMER FOR LOSS OF WAGES FOR THREE DAYS AND OTHER EXPENSE INCURRED FOR THIS USELESS EXERCISE WHICH SO FAR, IS ONLY BENEFITING EMEFIELE AND HIS THIEFY BAND OF BANKERS COMMITTEE FOR INTRODUCING SUCH AN USELESS AND UNPRODUCTIVE BVN EXERCISE.
MR EMEFIELE, DO NOT FORGET, THE SO-CALLED BANKING FRAUDS ARE WITHIN THE BANKING SECTOR ONLY AND IT IS THE BANKERS THEMSELVES WHO ARE INVOLVED IN THEM, NOT THE CUSTOMERS WHO JUST HAPPEN TO BE THE VICTIMS OF CENTRAL BANK REDUNDANT BVN POLICY INTRODUCED BY A REDUNDANT CENTRAL BANK GOVERNOR OF THE LIKE, EMEFIELE.
MR EMEFIELE, STICK THIS WRITE-UP IN YOUR BEDROOM AND READ IT EVERY DAY FIRST THING IN THE MORNING TO REMIND YOU WHAT YOU ARE AND THEN LOOK INTO THE MIRROR AT YOU FACE TO CONFIRM THE DETAILS.
every economical expert is telling nigeria to remove subsidy because it doesn’t work and it is destroying the nation. there are loads of things we can be doing for fuel, while we build our refining capacity. i believe the president is completely wrong on allowing subsidy to continue.
We will review and take appropriate action.