The Central Bank of Nigeria (CBN) has blamed Nigerians’ reliance on imports as the cause of the country’s naira devaluation.
The apex bank is therefore urging Nigerians to adopt homemade products to boost the Nigerian economy and prevent the naira from further depreciating in the parallel market.
CBN’s Director of Corporate Communications, Mr. Osita Nwanisiobi, recently revealed this during the opening session of a two-day exhibition organized by the apex bank in Owerri, Imo State.
Nwanisiobi, who was represented by the deputy director of the corporate communications department, said that during the Covid-19 pandemic, CBN’s Anchor Borrower program was the nation’s saving grace for improving the availability of rice.
The actions, he added, were aimed at empowering businesses and eradicating poverty.
Nwanisiobi, who spoke on the topic “Promoting Financial Stability and Economic Development”, said the CBN had implemented interventions in agriculture, manufacturing and other sectors.
“No successful economy thrives on promoting imported products rather than exporting locally made products,” he said.
He continued that “during the Covid-19 pandemic, rice was the most popular component of our palliatives. This is the result of CBN’s Anchor Borrower program for rice farmers.
Also speaking, Ms. Uchenna Onyene of CBN’s Foreign Exchange Department, who spoke at the event, urged Nigerians to use the naira with caution, citing Section 21, Subsection 4 of the CBN Act 2007.
She also urged Nigerians to adopt the CBN’s cashless strategy to reduce risk and improve the smoothness of transactions, noting that the bank is committed to delivering payments innovation for better customer experience.
“Capital inflows from Nigeria fell to a four-year low of $9.66 billion in 2020, falling further to $6.7 billion in 2021.
“International trade remained a major concern as Nigeria progressed in depicting historical trade. Nigeria’s international trade balance for 2021 fell to a deficit of 1.94 trillion naira, the largest on record.
“Nigeria continues to be affected by the repercussions. Nigeria’s exports increased by 51% to N18.91 trillion in 2021 from N12.52 trillion the previous year,” she said.
The increase in export profits, she added, was not enough to offset the 64.1% rise in import bills, which totaled N20.84 trillion.
She noted that this resulted in the outflow of foreign currency, a negative balance of payments of $5.26 billion which was effected in 2021, putting even more pressure on the local currency and necessitating the use of the external reserve.