There are lessons to learn from COVID-19 impact, CBN governor says

Nigeria must not allow the bitter lessons of the coronavirus pandemic to go to waste, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has advised.

Rather, he said, Nigerians should learn from other countries around the world that adopted drastic measures to protect their people and economies, by looking inwards.

Mr. Emefiele, who noted the devastation of the COVID-19 pandemic on countries and the global economy, said the novel disease has “rapidly permeated and profoundly changed the world.”

He said the crisis, which has led to a public health challenge, claiming the lives of over 123,600 people worldwide, has done incalculable damages to the global economy.

Apart from crude oil prices, which have declined, he said global airlines lost about $252 billion in revenue, with the pain growing across other industries, from hospitality to services.

“These outcomes have expectedly thrown the global economy into a recession, the depth and duration of which is currently difficult to fathom,” the CBN governor said.

“In fact, the International Monetary Fund (IMF) predicts that the global economy would decline by 3 percent this year,” he added.

The crisis, Mr Emefiele said, has forced countries to move away from “multilateralism”, by “fighting for themselves with several measures to protect their own people and economies, regardless of the spillover effects on the rest of the world.”

How economies reacted to COVID-19

Citing the World Customs Organisation (WCO) statistics, Mr Emefiele said about 32 countries and territories adopted stringent and immediate export restrictions on critical medical supplies and drugs specifically meant to respond to COVID-19 pademic.

As of April 10, the Global Trade Alert Team at the University of St. Gallen, Switzerland said about 75 countries adopted 102 export restriction policies, with Germany announcing export ban on all medical protection gears, including breathing masks, medical gloves and protective suits.

Also, French President Emmanuel Macron announced his country’s requisition of all face masks produced in the country, while India, between February 8 and April 6, released eight different export notifications banning several drugs and medical supplies.

The drugs and equipment included hydroxychloroquine, ventilators, personal protections masks, oxygen therapy apparatus, and breathing devices.

Besides, on April 3, he said the United States government invoked the war-era U.S. Defence Production Act to stop major U.S. mask manufacturer, 3M, from the export of respirator masks, N95, to Canada and Latin America.

Again, the International Food Policy Research Institute (IFPRI) reported that about 37 countries also enacted various food and agricultural produce export restrictions in response to COVID-19.

For instance, he said Vietnam, reputed to be the world’s third largest exporter of rice, suspended granting rice export certificates until the country “reviews domestic inventories”.

Likewise Russia, the world’s largest wheat exporter, announced a ten-day ban on the export of buckwheat and rice due to concerns over panic buying in local supermarkets.

‘Need to look inwards’

Mr Emefiele said Nigerians should begin to feel concerned about their future should the current wave of restrictions result in countries shutting their borders against food imports, medical care outside Nigeria.

“For how long shall we (Nigerians) continue to rely on the world for anything and everything at every time?” he asked.

“These restrictions as a result of the COVD-19 pandemic present a clear opportunity to re-echo a persistent message the CBN has been sending for a long time, which is even more urgent today: we must look inwards as a nation and guarantee food security, high quality and affordable healthcare, and cutting-edge education for our people.”

For a country of over 200 million people, and projected to grow to about 450 million in a few decades, he said Nigeria can no longer ignore repeated warnings about the dangers that lie ahead “if we do not begin to depend largely on what we produce locally.”

For him, “the security and well-being of Nigeria is contingent on building a well-diversified and inclusive productive economy.”

In June 2014, Mr Emefiele said the CBN disbursed over N1.3 trillion worth of foreign exchange for rice, fish, wheat and sugar imports in Nigeria.

Despite being one of the world’s largest producers and exporters of palm oil, cocoa and groundnuts a few decades ago, he said Nigeria today imports nearly 600,000 metric tonnes of palm oil.

In the contrary, he said Indonesia and Malaysia, two countries that were far behind Nigeria in palm oil, today export over 90 per cent global of demand, while Indonesia earned $12.6 billion from its oil and gas sector in 2017, against $18.4 billion realised from palm oil exports.

“I believe the COVID-19 pandemic and the immediate response of many of our trading partners suggest it is now more critical than ever that we take back control, not just control over our economy, but also of our destiny and our future,” the CBN governor said.

Noting the effort of the President Muhammadu Buhari administration to promote backward integration, he said the CBN on its part created several lending programmes to provide hundreds of billions to smallholder farmers and industrial processors in several key agricultural produce.

These policies and programmes, he said, were to reposition Nigeria to become a self-sufficient food producer, creating jobs, supplying key markets across the country and dampening the effects of exchange rate movements on local prices.

He said the CBN has consistently harped on the need to take decisive actions to fundamentally transform the structure of our economy against the damaging effects of unsustainable propensity to import.

COVID-19 stimulus package

He said the CBN’s N3.5 trillion stimulus package, to tackle the effect of COVID-189, was aimed at strengthening the Nigerian economy through the funding of targeted measures to households, businesses, manufacturers and healthcare providers.

These measures, he said, were deliberately designed to support the federal government’s immediate fight against COVID-19 and build a more resilient, more self-reliant Nigerian economy.

“We do not know what the world will look like after this pandemic. Countries may continue to look inwards and globalisation as we know it today may be dead for a generation,” he said.

“Therefore, as a nation, we cannot afford to continue relying on the world for our food, education and healthcare.

“The time has come to fully transform Nigeria into a modern, sophisticated and inclusive economy that is self-sufficient, rewards the hardworking, but protects the poor and vulnerable, and can compete internationally across a range of strategic sectors,” he added.

Towards self-sufficiency

To achieve self-sufficiency in food production, education and healthcare, the CBN boss urged Nigerians to support the government to immediately build the infrastructure, including reliable power for industrial activity, and support both smallholder and large scale agriculture production in select staple and cash crops.

Other steps, he added, include the creation of an ecosystem of factories, storages, and logistics companies to move raw materials to factories and finished goods to markets; deploy fiscal priorities to create a robust educational system that enables critical thinking and creativity.

Also, he said the government should develop a healthcare system that is trusted to keep all Nigerians healthy, irrespective of social class; facilitate access to cheap and long-term credit for SMEs and large corporates; develop and strengthen pro-poor policies to bring financial services and security to the poor and the vulnerable.

In addition, he wants government to expedite the development of venture capitalists for nurturing new ideas and assisting Nigerian businesses to compete globally.

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