There is no gainsaying that the Central Bank of Nigeria (CBN) has demonstrated enough capacity in the discharge of most of its statutory functions, top of which is the management of the nation’s fiscal policies.
In doing this, the CBN initiated a lot of policies and strategies which have enabled it to adequately moderate and simulate activities in the economy, thus defending the naira in the area of foreign exchange balancing acts.
Besides, the apex bank has indulged in a multiplicity of intervention programmes to the extent that it has left its footprints in virtually all the sectors of the economy, but with greater emphasis on agriculture and agro-allied sectors.
It is in the light of CBN’s continual efforts to add value to the system that analysts are upbeat that the bank’s latest campaign tagged ‘PAVE ‘ which simply means Produce, Add Value and Export is among the various initiatives capable of reducing the pressure on the nation’s foreign reserves while at the same time boost foreign earnings.
Simply put, PAVE explains the concern for Nigerians to engage not only in the domestic production of goods and services in the real sector of the economy but go a step further to process such commodities into semi-manufactured and manufactured products for export.
It also entails the need for Nigerians to consume what they produce domestically than imported goods.
Expected to make Nigerians consume what is produced in the country, add value, and even export, the Produce, the PAVE option which many said is a welcomed development, will also strengthen the nation’s industrial sector.
PAVE is an initiative akin to South-East Asia’s much referenced export-led industrialization policy which changed the economic fortunes of countries such as South Korea, Taiwan, Malaysia, and Singapore.
Designed to be key for fast-tracking a bucket of substitutes to crude oil export, PAVE encourages backward integration for the local production of select items.
In Nigeria, this initiative, if fully implemented will mitigate against future severe consequences of shocks beyond the control of the nation, hence the need for all to join hands to ensure its success.
No doubt, it is an answer to achieving an economy with the capacity to absorb an increasing labour force, and among the key policy strategy of the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele towards resolving Nigeria’s economic problems.
Experts are of the view that PAVE is relevant to the Nigerian domestic economic realities, adding that it has become a clarion call to galvanize Nigerians into action towards restoring the glory days of agriculture.
Also, it is a credible platform to ensure the elusive linkage effects between agriculture and the manufacturing sectors of the economy, while it provides a lasting shock absorber against the vulnerability of the Nigerian economy to the instability that characterizes crude oil production and export.
Speaking recently in Akure, the Ondo State Capital at the 32nd Seminar for Finance Correspondents & Business Editors, Godwin Emefiele said despite the headwinds associated with the pandemic, the Central Bank has worked very hard to ensure that Nigeria remains a vibrant economy with a diversified mix of opportunities across sectors such as ICT, Manufacturing, Solid Minerals, Trade, and Agriculture.
The Governor, who was represented by the Deputy Governor in charge of Corporate Services, Mr. Edward Lametek Adamu recalled that the COVID-19 pandemic was one of the biggest crises that have faced mankind in recent history, which impacted economies, and disrupted business activities globally
Emefiele however, maintained that the Produce, Add Value, and Export option is expected to make Nigerians consume what they produce, add value to it, and even export the surplus.
He said, “Notwithstanding these modest achievements, we cannot afford to rest on our oars as the work is far from over. I am mindful that our goals may appear ambitious to some. But I am resolute and determined that we can achieve it. Many countries that are much less endowed than Nigeria are doing it.
“Consider for example that agriculture exports alone from the Netherlands were about $120 billion last year. Yet, Netherlands has a landmass of about 42,000 square kilometers, which is much smaller than the landmass of Niger State alone, at over 76,000 square kilometers,” he said.
The CBN boss further stressed the need for all to ensure the success of the PAVE, stressing that it is a clarion call to patriotism.
“The pandemic impacted economies and disrupted business activities globally. Nigeria, like most commodity-dependent countries, was not spared the deleterious impact of the pandemic, given our dependence on crude oil export as a major source of revenue and foreign exchange,” Emefiele said.
Faced with the global financial crisis of 2015, characterized by a fall in commodity prices, including crude oil prices, resulting in depletion of the nation’s foreign reserves and a fall in public sector revenue, Mr. Emefiele saw the need to deploy some variants of economic nationalism as a solution.
He saw this as the only viable alternative to minimizing the vulnerability of the Nigerian economy to instability, arising from crude oil price fluctuation.
This is in addition to the average Nigerian consumption pattern, which indicates a preference towards the consumption of foreign-made goods including food, which implies persistent depletion of the nation’s foreign reserves.
In recent times, most emerging economies have had to swallow hook line, and sinker the Washington consensus mantra of trade liberalization, without recourse to the internal dynamics of their respective economy.
Emefiele equally noted that being a developing economy, the Bank’s approach to monetary policy must incorporate context and this is done by innovating around the use of available instruments.
He said, “We understand that monetary policy must coordinate well with fiscal policy towards addressing the numerous developmental challenges our nation faces.
“Fortunately, the enabling statute envisages this and empowers us to intervene where and when necessary. Under my watch, the Bank has done this through various development finance initiatives. And with the benefit of hindsight now, we can safely say that the outcomes have so far justified our approach.
“As you may recall, by June 2014 when I assumed office, the price of crude oil had substantially softened. Geopolitical tensions were widespread and discussions around policy normalization, post-global Economic and Financial Crisis (GEFC), filled the air, causing acute capital flow reversals, especially in emerging markets like Nigeria.
“Our external reserves had fallen from a peak of $62 billion in 2008 to $37 billion. Also, due to the sharp drop in crude oil prices, the nation experienced a sharp drop in monthly foreign earnings from about $3.2 billion to less than $1.0billion,” he said.
The CBN boss said “Let me also remind us of the commitment I made while unveiling my vision for the CBN. It is on record that I had pledged to build a Central Bank that is professional, apolitical, and people-focused. My mission was and still is, to bequeath a Central Bank that focuses on building a resilient financial system that can serve the growth and development needs of our beloved country, Nigeria.
” For us, the CBN was to act as a financial catalyst by targeting strategic sectors that could create jobs on a mass scale and reduce the country’s import bills.
“To solve the immediate and long-term economic challenges of the country, we needed to create an enabling environment with appropriate incentives to empower innovative entrepreneurs to drive growth and development,” Emefiele said.
