As a result of the Tuesday meeting between the CBN and the senators in the National Assembly to discuss the constant fall of the naira, the Governor of the Central Bank of Nigeria (CBN) Mr. Godwin Emefiele, has explained to the Senate that some harsh monetary decisions taken by the United States and Nigeria’s over dependence on foreign goods were responsible for the continuous depreciation in the value of the naira against major foreign currencies.
The Chairman of the Senate Committee on Media and Publicity, Senator Sabi Abdullahi, stated this when he briefed journalists at the end of the closed-door meeting with the CBN boss.
Emefiele was said to have stated that other factors like the declining commodity prices and the geo-political tensions along important trading routes were equally injurious to the naira value.
He (Emefiele) touched on the global economy conditions in which he informed us that we are not immune from external shocks that are currently going on in the world. These shocks include the following: declining commodity prices, geo-political tensions along important trading routes and tightening of monetary policies in the United States of America.
The Senate appreciated the need to support the various policies being formulated to strengthen the currency.
Abdullahi added that the Senate also acknowledged the pains that many people were experiencing currently, especially in the light of the shortage of foreign exchange for legitimate businesses.
He, however, said that having carefully considered the policies of the CBN, the upper legislative chamber would like to commend and support them because they were mostly geared towards increasing local production, creating jobs in the country, safeguarding the commonwealth and expanding economic opportunities and growth.
It is, therefore, critical that we all join our hands together to seek both short-term and long-term solutions to our underlying problems of non-diversification of foreign exchange earnings and revenues rather than pointing fingers at who did what and who’s to blame.
The Senate believes strongly in the resilience of the Nigerian economy and the ingenuity of the Nigerian people, and as such, we are confident that we will all pull through these difficulties and come out as an equitable and prosperous nation.
This appearance by the CBN governor and his management team is in line with Section 8 of the CBN Act, 2007, which requires that the governor of the bank provides the National Assembly periodic updates on the activities of the bank as well as the performance of the economy.
In view of the above, the CBN governor presented a detailed, comprehensive and lucid account of the performance of the Nigerian economy in the last one year.
The Senate spokesperson noted that Emefiele explained the occurrences within the Nigerian economy, especially with respect to the over 70 per cent decline in oil prices from about $116 per barrel in June 2014 to about less than $30 presently.
The CBN governor also gave us an insight into the bank’s analysis and understanding of the situation and, therefore, the rationale underlining the various policy actions the bank has taken over the past couple of months.
He also provided an insight into other countries that are facing similar difficulties and how they have dealt with them. Based on these analyses, it is clear that Nigeria is not doing badly, and I think we are on course to see how we can bring back Nigeria into the path of economic prosperity.
After the presentation, of course, there were questions from distinguished senators on many issues, especially the stoppage of foreign exchange to the Bureaux De Change, the gradual rise in inflation, and the fallen foreign exchange reserves, among others.