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CBN Gov defends exchange restriction policy

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GOVERNOR of Central Bank of Nigeria (CBN), Godwin Emefiele, has said that the introduction of restriction of official foreign exchange for the importation of 41 items has helped to lift Nigeria’s economy from recession.

Mr. Emefiele, who stated this while presenting a keynote address at the 26th Seminar for Finance Correspondents & Business Editors that started at the Reverton Hotel & Suites, Lokoja, Kogi State, said “in today’s world, countries have used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries.

In other words, should Nigeria with insatiable taste for foreign goods to the detriment of the domestic economic realities( unemployment and imported inflation) throw its borders open to indiscriminate importation of goods and services? This was the prevailing condition in Nigeria before the introduction of restriction of official foreign exchange for the importation of 41 items. It was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting GDP-recession and an embarrassing rise in the level of unemployment confronting the economy.

He said given these salutary effects on the economy, “it can be argued that the stance of classical economists who argued that trade protectionism notwithstanding, to override the utility of selective protection in form of the 41 items to resolve the challenges facing the economy can hardly be overemphasized.

Pragmatic economic nationalism therefore, would ordinarily vote in favour of protecting the domestic economy, as long as it does not infringe upon the tenets of “beggar-thy-neighbor” policies.”

He described protectionism as “the restriction of trade between nations, utilizing means such as tariffs on imported goods, restrictive quotas, and a variety of other inhibitive government regulations, designed to discourage imports and prevent the foreign dominance of local markets.

Protectionism directly contrasts with the system of free trade in which the trading in goods and services between or within countries flows unobstructed by trade restrictions.

At the heart of protectionist policies is the desire to spur the domestic economy for enhanced local production and to discourage dumping in order to protect domestic industries from foreign take-over or competition.
Theme of the Seminar was “Monetary Policy Implementation amidst Global Economic Protectionism.”

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