Govt is doing all it can to get Nigeria out of recession, says Emefiele

Forum 7 years ago

Govt is doing all it can to get Nigeria out of recession, says Emefiele

Worsening economic woes occasioned by recession forced the self-styled introvert Central Bank of Nigeria (CBN) Governor, Godwin Emefiele out of his shell on Saturday, to tell Nigerians what the Federal Government and apex bank are doing to turn the country’s fortunes around in an interactive session with publishers and media managers at the Lagos office of the CBN, as captured by The Guardian.

Mr. Governor, Nigeria is in recession, the first in two decades; things are bad, people are suffering, Mr. Governor, how did we get here?
Thank you very much for that question, first, I must apologise when you said people are suffering, I must apologise that this is happening to our people. But I must confess that what is happening today is as a result of a world global crisis. Global crisis in the sense that we’ve seen commodity prices dropping, we’ve seen geopolitical tensions all around the world. Here, we are talking about political tension between Russia, Ukraine and the U.S. and E.U. staying on one side, and watching, political tensions between Iran and Saudi Arabia trying to play their game, as usual.

Of course, the U.S. FED, following the mortgage crisis of 2009, had taken a couple of actions, which given the size of the U.S. economy in the world, some of the actions that the US economy had to take had adverse impact, both positive and negative on emerging markets and frontier markets, where Nigeria unfortunately stands today.

But I think that when you want to address the issue of how did we get here, it is important to go back into history; to remind ourselves that there was a time when this country survived only on revenues from agriculture produce; we survived with revenues from groundnut pyramids in the northern part of the country. This country survived with revenue from the western part, I’m talking about cocoa that was being produced and exported, to the extent that the tallest building at that time, the cocoa house, was built with revenue from export of cocoa.


There was a time when this country survived with revenue generated from the production and export of palm oil, and palm oil products from the Midwestern and Southeastern parts of the country. At that time, I’m talking about the 50s and the 60s; Nigeria was the largest producer and exporter of palm produce in the world. Unfortunately, we abandoned it because we found oil.
I wish what we did at that time was to ensure that we held strong to our potential in the agricultural sector. If we had held strong to our potential in agricultural sector, and in the same vein, held strong to the potential that we have because we found oil in Nigeria, or story will be different today. Unfortunately, what happened was that because we found oil, we let our guards down on the agricultural sector. I will give you an example; this for me is an example of a country that didn’t plan properly.

Example is Norway, a country with a population of less than five million people. Norway produces agricultural produce particularly fish. They produce and export fish today; it also produces crude oil to the extent that today, Norway is a country that has one of the highest investments in Sovereign Wealth Fund (SWF). Norway indeed has $873 billion in its SWF, and notwithstanding having this amount in its SWF; it also takes very seriously, the produce from fish production to the extent that the country survives on what I call on its annual basis from revenues it generates from the export of fish. What does the country do with revenues from crude? It invests it and at any point the country wants to make use of the fund, it only uses it for infrastructural development. That is a country that has planned for its people; but unfortunately, we didn’t plan this way for our people, and that is why we are where we are today.

I will give you a few examples, in September, 2008, Nigeria’s FX reserves stood at $62billion. What did we do with $62billion at a time crude price was almost $120 per barrel?