Atiku’s Forex Policy Won’t Work – Emefiele

• Atiku’s Forex Policy Won’t Work – Emefiele

The governor of the Central Bank of Nigeria, Godwin Emefiele, has warned that the suggested foreign exchange policy of the Peoples Democratic Party (PDP) presidential candidate is a recipe for disaster.

Alhaji Atiku Abubakar, PDP presidential candidate, had suggested that the central bank should free float the exchange rate in accordance with market forces, saying the current policy bred “multiple exchange rates being exploited by opportunists, rent-seekers, middlemen, arbitrageurs, and fraudsters”.

According to Emefiele, the MPC has reviewed the policy 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”.

“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.”

Emefiele, who was addressing reporters after Monetary Policy Committee (MPC) meeting in Abuja, added: “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.”

“Normally, the Central Bank as an independent institution is apolitical but it is also important that at the MPC meeting today we asked ourselves if there is any merit in it to begin to say that we should look at free-floating the currency or that we should allow free import of goods that we have restricted. The MPC came to a conclusion that this was a wrong premise.

“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.”

The CBN led Monetary Policy Committee left interest rate unchanged at 14 per cent.