The outgoing Managing Director of First Bank of Nigeria Limited, Mr Bisi Onasanya has called for the support of stakeholders in the Nigerian economy over the stance of the Central a bank of Nigeria (CBN) of foreign exchange.
Onasanya speaking on “Banks, Bankers and Imperatives for Sustainable Banking” at the valedictory lecture organized in his honor by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos yesterday said CBN stance on foreign exchange policy was clear and should be respected and accepted in the light of full support from the government.
The CBN had earlier in the year adopted a firm stance on exchange rate management removing 41 items from eligiblity for forex and has continued to maintain its stand not to devalue to currency. It has consequently kept the official rate between N196.7 and N197 to the dollar although the value of the currency has dropped to a record low of N250 at the parallel market.
According to him, “the present ban on 41 items from the foreign exchange market by the CBN illustrates the complexities of managing an economy such as ours. On one hand, there is a very strong case to be made for shifting increasingly scarce resources away from spending on imports towards boosting domestic production, first for local use, and then, much later for export. Indeed, in the case of the items on the “restricted list,” evidence of strong local capacity to produce these items abound.”
He noted that the CBN had pursued administrative measures that had tightened liquidity, and kept the official rate near constant for quite some time, adding that the apex bank will loosen monetary conditions as it tries to bring bank lending rate down in support of real sector growth, in a decelerating economy.
He also urged banks to focus on their roles as catalysts for funding and development, rather than chasing profitability by all means, even with the destructive tendencies. He said there are no incentives for any bank for shying away from developmental roles and responsibilities.
Source : Leadership