Godwin Emefiele, governor of the
Central Bank of Nigeria (CBN), has warned that floating the naira would be
disastrous to the nation’s economy.
Emefiele said this during the
monetary policy committee (MPC) meeting of the apex bank in Abuja.
In November 2018, Atiku Abubakar,
presidential candidate of the Peoples Democratic Party (PDP), had said it was
worth the risk to float the naira even if it results in inflation, adding that
any side effect would be balanced out by attracting more inflow of foreign currency.
But speaking on Tuesday, the CBN
governor said adopting such a policy would be as good as going back to the “era
of Structural Adjustment Programme (SAP)”.
“The MPC reviewed it and
concluded that it would be wrong. It is as good as saying that we should go
back to the era of Structural Adjustment Programme (SAP) in Nigeria,” he said.
“The implication can better be
imagined. It will certainly lead to capital flight, lead to massive
depreciation or devaluation of the currency and ultimately to currency crisis
in Nigeria and I think we should all know that it is a road to perdition to
ever go in that direction.”
The CBN governor also dismissed
insinuations about the existence of a capital control regime in the country.
He said although the CBN is completely
apolitical in its activities as an independent institution, it would not
hesitate to respond to economic issues within its purview.
“There is no capital control in
Nigeria today because you cannot find the CBN trying to intervene in the market
for demand and supply of foreign exchange,” he said.
“We cannot be talking about
allowing import of items that can be produced in the country today, exporting
jobs from Nigeria to foreign countries, and we say we have the interest of
Nigeria at heart? We don’t agree with anybody. It is a wrong premise to say
that you will allow imports to just flood the country just because you want to
please anybody. It is not in our interest.
“We will remain apolitical. We
will not want anybody to drag the central bank into issues that are within our
remit, otherwise we would respond to it.”
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