Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said the removal of 41 items from the eligible list for foreign exchange was a major factor that helped the country exit recession which it officially entered into in 2016. Emefiele, speaking at the opening ceremony of a seminar for finance correspondents and business editors in Lokoja, stressed the need to embrace a protectionist stance to grow the country’s economy. Represented by the CBN director, Monetary Policy department, Dr. Moses Tule, Emefiele said the introduction of restriction of official foreign exchange for the importation of 41 items “was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting GDP-recession and an embarrassing rise in the level of unemployment confronting the economy. Themed “Monetary Policy Implementation amidst Global Economic Protectionism” Emefiele said the implications of protectionism and the challenges it poses to the effective implementation of monetary policy is one that cannot be overlooked. According to him, the implementation of the 41 items, in addition to the other complementary macroeconomic policies, “was effective in lifting the Nigerian economy out of recession.” He noted that the real Gross Domestic Product (GDP) had grown by 1.40 per cent in the third quarter of 2017, up from 0.72 per cent, and contraction of 0.91 per cent in the second and first quarter of 2017, respectively.
Querying why Nigeria with insatiable taste for foreign goods to the detriment of the domestic economic realities, such as unemployment and imported inflation, throw its borders open to indiscriminate importation of goods and services, he said countries across the world have used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries.
The CBN governor noted that the selective protection in form of the 41 items to resolve the challenges facing the economy can hardly be over emphasised, saying pragmatic economic nationalism “would ordinarily vote in favour of protecting the domestic economy, as long as it does not infringe upon the tenets of beggar-thy-neighbor policies.” He linked the origin of the global trend of protectionism to the Great Depression, the Global Financial Crisis of 2008, saying the “aftermath of the crisis has highlighted governance issues which have impacted on the financial sector with significant implications for international trade. “The great trade collapse” which resulted from the crisis also reflected the policy choices of countries deeply integrated into the global trading system which shifted their trade policy orientation from an era of free trade to the adoption of protectionist measures in an effort to cushion the effects of the crisis on their domestic economies. “Interventions such as import restrictions, export subsidies, and anti-dumping measures are examples of “beggar-thy-neighbor” policies adopted by countries, which have weakened the liberal global trading system,” Emefiele added.
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