One-third Of Global Economy In Recession – Emefiele  

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele has said that about one-third of the world’s economy is currently in recession due to the damaging effects of COVID-19 pandemic and the ongoing war between Russia and Ukraine.

Emefiele stated this yesterday in Abuja while addressing Foreign Affairs and Aviation stakeholders at a meeting with the speaker of the House of Representatives, Femi Gbajabiamila.

He also noted that the bank is working outside the box to mop up foreign exchange and strengthen the Naira and, by extension, the economy through what he called the RT 200 policy.

According to the CBN boss, the RT 200 is the policy focusing on the repatriation rates of non-oil exports proceeds into the Nigerian economy, which is almost a billion dollars in the third quarter of 2022.

What is happening is a global challenge. Indeed, as I speak I can say that the global outlook today is darkening due to deepening global slowdown.

“Today more than one-third of the global economy is in recession. The global community is facing rising incidents of unemployment. Indeed, most of the countries of the world are facing rising inflation. As a result, this year alone, the USA happened to raise rates almost by 3.75 percent in 2022. That has created some serious inflation pressures and depreciation on the currencies of other countries.

“From the CBN since February this year, we introduced the RT 200 programme in order to encourage repatriation of Forex proceeds from exporters of non-oil export products. We are gratified that the programme is doing well. When we started it, the first six weeks in February and March, we were only able to see repatriation, we paid rebates on repatriation of about $62 million. The second quarter, we saw an astronomical improvement to $622 million in exports proceeds of non-oil. For the third quarter, we have seen almost close to $1 billion,” Emefiele said.

The CBN boss was responding to the issue of $700 million trapped funds of foreign airlines which had threatened to stop flying Nigerian routes from October 28 if nothing was done by government to resolve the backlog.

Emefiele told the gathering that contrary to IATA’s representative’s position that nothing had been done to reduce the backlog, $265 million had been earmarked for disbursement to the foreign airlines through their various banks.

“Aside from the prioritisation of FX we have always accorded airlines, on the 31st of August I made a decision to use our discretion to allocate $265 million to the foreign airlines.

“We did $110 million in spot and the rest 60 days forward. On that day we allocated to IATA $32 million through UBA, Qatar Airways got $22.8 million through Standard Chartered, Emirates got $19.6 million through Access Bank, BA got $5.5m through GTB; Virgin Atlantic got $4.8 million through Zenith and so on.

“How then can they go about and begin to say they have not received their money? This is aside from the so-called 8 or 10 percent you say you are getting Mr Fatokun (referring to the IATA representative).

“This is extra allocation which we use our own discretion to give you and which I have told you personally that we would continue to do so as to make you guys happy so you don’t continue to blackmail this country. Out of that, $120 million would be due on the 31st of October. The monies would be paid. So what else do you want me to do. I must confess there would be delay. Gentlemen, I can print Naira, even though I have been accused of printing Naira, but I cannot print dollars. We have to earn it or borrow it. All these things we are talking about boils down to reciprocity and IATA cannot shy away from that,” he said.

He also called on other foreign countries to grant landing permits to Nigerian airlines to fly their routes so as to reduce the burden of accumulated funds going forward.

The Speaker, House of Representatives, Femi Gbajabiamila, in whose instance the meeting held, had earlier told the gathering that the issue of blocked or trapped funds of foreign airlines was giving the House a great cause for concern, hence the need for the forum to find lasting solutions bearing in mind the prevailing economic imperatives.

The minister of Aviation, Sen. Hadi Sirika told the gathering that “Nigeria under President Muhammadu Buhari has shown the capacity and audacity to stand up in difficult moments to do the right thing to help the country”.

He recalled that “in 2016 when we came in, there were about $480 million blocked in Nigeria that year; we were in recession and revenues had dwindled. We just heard the CBN Governor say we either earn or borrow it. At that moment, we had not even started borrowing. So, we went to Mr President and informed him of the difficulty we were in. And he asked the CBN Governor and Minister of Finance to resolve the problem, which was done. So, we have demonstrated as a country to be able to respond even in difficult moments to things that are obligations upon us,” assuring that the issues will be resolved.