Photograph — Brookings Institute

Foreign investors that intend to repatriate their funds from Nigeria are guaranteed to do so, central bank governor Godwin Emefiele has said, in spite of foreign exchange-related revenue shortages the country is currently grappling with in light of the coronavirus-induced dip in oil sales globally.

The central bank has put in place policies to ensure an orderly exit for those that might be interested in repatriation, it said in a Twitter thread while urging investors to be patient as such repatriations are processed, owing to the Bank’s policy of orderly exit of investments.

“Foreign exchange available would be devoted to strategic importation or service obligations that are the priority,” the tweet read with Emefiele adding in a separate statement that “the CBN, in collaboration with the Federal Ministry of Industry, Trade and Investment, is committed to galvanizing the manufacturing sector in a bid to reset the economy.”

Several reactions have trailed the announcement by the apex bank on social media with some questioning the decision to allow scarce dollars to leave the economy amid the ongoing crisis – the coronavirus outbreak and tumbling oil prices are triggering a dollar shortage in Nigeria. Prior to this, commercial banks in the country late March reduced international spending limits by their customers abroad amid the fragile currency situation. 

The move to curb dollar purchases was seen as a precautionary, considering banks may be experiencing a shortage of foreign currency available for them to sell to their customers due to the falling forex earnings. Analysts expect Nigeria’s external reserves, which were about $36.3 billion as of February, to fall below $30 billion by September.

Meanwhile, others believe the move will help retain a reasonable level of investor confidence in the country. This is because foreign investors usually want liquidity guarantee – that they can pull out their funds whenever they want with little or no difficulty.

“Good one by the Apex bank. Timely response to instill confidence and this could go a long way to perhaps saving face for the Naira,” a Twitter user by the name Hilary Ndimele (@Hilitomilito) said.

Addressing the meetings with banks, manufacturers in the health sector, and the broader manufacturing group, Emefiele reiterated the need for fiscal and monetary authorities to work together to moderate the health and economic impact of the ongoing pandemic.

“The COVID-19 presented Nigeria with an opportunity to reset the economy and as such there was a need for the country to prepare itself to get the manufacturing sector to work, while the banking sector supports the economy,” the apex bank chief said. “With the revenue drop from crude, Nigeria has no choice but to diversify its economic base.”

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