CBN: Nigerians must patronise local goods to help the naira

The Central Bank of Nigeria (CBN) has urged Nigerians to be more patriotic by patronising locally manufactured goods so as to preserve the foreign exchange reserves and strengthen the naira.

Bayo Adelabu, deputy governor (corporate services) of CBN, said this when members of the house of representatives committee of banking and currency, paid a courtesy visit on the CBN on Wednesday.

“What the CBN is saying is that we need to become more patriotic. We should patronise locally made goods and services,” Adelabu said.

“We do not need to be importing everything. That is part of the reasons we are seeing pressure on the naira. Why should we be importing fruits, eggs, tooth picks?

“The decision of the monetary policy committee (MPC) was the best we could do under the circumstance the economy is presently.”.

He highlighted another factor contributing to the pressure on the naira to include declining oil revenue from oil.

“Our source of revenue in this country is just oil and when oil price declined by about 25 per cent in the last one month, it resulted to a lot of pressure on the foreign reserves, he noted.

“The pressure on the naira, apart from the declining oil prices is also as a result of liquidity in the banking industry,” he said.

Adelabu pointed out that the CBN increased the cash reserve ratio (CRR) to reduce the liquidity in the banking industry.

“The only thing to do to stop banks from granting loans to these customers that make frivolous dollar demand is to mop up more of the monies available to the banks.

“That was why we increased the CRR on private sector deposits. We believe it will reduce the pressure on the foreign reserves. If we don’t do that, the impact on the common man is going to be increased cost of production.

“CBN want banks to lend to the critical and desirable sectors of the economy and to sectors that can engender production activities, not trading, not to import toothpicks, Adelabu added.

Jones Onyeriri, the chairman of the house of representatives committee, on banking and currency urged the CBN to look at the impact of it’s polices on the masses.

“The CBN needs to look at the impact of its policies on the down trodden because as representatives, we deal directly with these people.

“I know that the core mandate of any monetary authority is to ensure that there is credit accessibility to the people, especially in Nigeria where you have a middle class that is almost extinct.”

Furthermore, he stressed the need to recreate the middle class in the country.