CBN refuses to devalue Naira, plans PAVE

*Naira notes.

*Naira notes.

31 October 2015, Abuja – Governor, Central Bank of Nigeria, CBN, Mr. Goodwin Emefiele has restated that the CBN will not devalue the Naira anytime soon to revive the falling economy.

He said that the Bank has had to depreciate the currency from N155 to N197 in February, recalling that even President Mohammdu Buhari and Vice President Yemi Osinbajo had also re-echoed the position of the CBN.

Emefiele however stated that the CBN would soon launch a policy called PAVE meaning “Produce locally, add value and export your product and earn your foreign exchange for your imports” to help local industries.

He spoke to State House Correspondents after a meeting on the economy with the Vice President, Yemi Osinbajo at the presidential villa on Friday.

He said: “There has been a lot of talk on whether or not we want to depreciate our currency again.

The truth is that we had adjusted the currency by depreciating it from N155 to N197 in February this year.There is no intention to depreciate or adjust the currency any longer.

“The President has been very clear on this. The Vice President has been very clear on this and let me further reiterate our position at the Central Bank of Nigeria that we are not considering any further depreciation of the currency.

“What we are trying to concentrate on right now is how to improve and deepen the foreign exchange market by improving supply of foreign exchange into the market.

And to do so, we are trying to encourage people to export and earn your export proceeds and use your export proceeds to import whatever you need to import.

We are also concentrating on how to reduce the import of items that we can produce in the country today.

“So that is our focus. I’m saying and very soon the CBN will be launching a campaign called PAVE, which means “Produce locally, add value and export your product and earn your foreign exchange for your imports’’ because this is the only way we can support the efforts of CBN in intervening and providing foreign exchange in the market to meet the import needs of our people.

“It is very clear, what we need to do is reduce our propensity to import but we will not depreciate our currency. For now we will not.”

The governor also revealed that the CBN was working a list to exclude a number of items from foreign exchange market.

“First of all, the CBN does not have the power to ban the import of any item.
What we have done is to exclude certain items that are imported into the country from obtaining foreign exchange from the Nigerian foreign exchange market.

“Yes, it is also true we held a stakeholders’ meeting with the organized private sector and prominent and leading private sector stakeholder were at that meeting.

“It was not meant for the press. The purpose of that meeting was to engage the private sector to make the private sector understand that government realizes that they are engine of growth and we also used the opportunity to explain to them the basis and purpose of those policies that we have introduced and at the end of that meeting they were very happy, they saw our position and indeed at the end of that meeting some of them in fact provided us with the names of some items that should be included in the list that should be excluded from foreign exchange.

“And I must confess that at this stage given the determination of some of the organized sectors to say that yes, they produce these items and that we should exclude those items from foreign exchange.

We are reviewing that list and we may in due course include more items products that can be produced in Nigeria in the list of items that will be excluded from foreign exchange in the Nigerian foreign exchange market”, he said.

Meanwhile he Naira on Friday depreciated further at the parallel market amidst intense regulation of the activities of operators of the Bureau de Change (BDCs) by the Central Bank of Nigeria (CBN).

The currency lost N0.5 to the dollar as it exchanged for N226.5, as against its previous value of N226.

The official exchange rate at the interbank window remained at N197 to the dollar.

Traders at the parallel market attributed the recent depreciation of the naira to the apex banks further tightening of the conditions of operation of the BDCs, making more people to access forex at the parallel market.

They said that the CBN now required operators of the BDCs to show the name of the person/company buying forex, his Bank Verification Number (BVN) and his ticket, if he was travelling.
*Adekunle Aliyu & Levinus Nwabughiogu – Vanguard

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