Nigeria’s external reserves hit 39mths high of $38.2bn—Emefiele

Godwin Emefiele, CBN Governor

…As Emefiele says Foreign direct investment rising***

Governor, Central Bank of Nigeria( CBN) yesterday, disclosed that the nation’s external reserves have risen to $38.2 billion, the highest in 39 months.

Emefiele disclosed this in Agbara, Ogun State while commissioning Unilever Plc’s    10,000 metric tonnes Blue Band factory.

“We have seen reserves move up from the $23 billion I talked about in October 2016, but as I speak today, external reserves are $38.2 billion.” Emefiele said that the Unilever plant was made possible by the foreign exchange restrictions placed on the 41 items.

He said: “When the restriction of foreign exchange (forex)   for the 41 items came on board about two years ago; before that time, Unilever had a factory producing Blue Band margarine. But margarine was also part of the 41 items.

The Managing Director and the executive team of Unilever Nigeria visited me in Abuja and said they wanted us to grant them some form of forbearance. I said there was not going to be any forbearance, but that if he promised to re-establish the factory in Nigeria because as at that time their factory had been dismantled in Nigeria and taken to another country.

“And he (Unilever managing director) made a promise that between 12 to 18 months the factory would be re-established in Nigeria. Based on that, we granted them some form of forbearance that made it easy for them to import margarine into Nigeria, but we kept monitoring them and we were discussing.

“The entire essence is to say that by re-establishing that factory here in Nigeria, he has created direct jobs for Nigerians in this factory. He created indirect jobs for Nigerians by virtue of the fact that he buys palm oil which is part of the formulation that he uses in producing margarine.” What does it take produce margarine? It is mixing oil and water. By creating indirect jobs by buying from people producing oil in Nigeria, he feeds millions of people.

“That is the entire idea. I keep saying we do not have foreign exchange to allocate to import products that can be produced in Nigeria. I am happy that Unilever has proved us right that Blue Band margarine can be produced in this country.

So far they are doing about 10,000 metric tonnes per annum and he has promised that he is going to ramp it up to 50,000 metric tonnes. By doing so you create jobs, which is what we are talking about. By creating jobs, you save the country forex that is needed to create job

In the meantime, Central Bank of Nigeria (CBN) Governor Godwin Emefiele has said the restriction of foreign exchange access for 41 items has led to massive foreign capital inflow.

Inaugurating Unilever Nigeria’s 10 million Euros Blueband factory in Agbara, Ogun State, yesterday, Emefiele said that global confidence in the economy was rising, with  investors finding Nigeria’s market irresistible.

Emefiele said the economy was witnessing positive feedback from foreign investors who are seeing great potentials in it. “We are singing positive songs. We have seen growth in Gross Domestic Product (GDP), inflation has dropped while we continue to take impressive steps to strengthen the economy,” he said.

The CBN boss also said foreign exchange reserves had climbed nearly three-year high at $38.2 billion, as more investors key into the opportunities presented by the Investors’ & Exporters Forex Window created in April. The foreign reserve rose to current position from its low of $23 billion in October 2016. He said the I&E Forex window has attracted over $10 billion investment inflows since inception.

Emefiele described the factory as part of the feedback from foreign investors whom he had  encouraged to begin production in the country to create jobs and empower the people.

He said Nigeria cannot continue to create jobs in other countries, and shutting down local factories, as is the case when local raw materials that should be produced locally are imported.

The CBN boss was “very delighted” by the project. He said: “Nearly two years ago, we restricted forex access for 41 items and we were criticised. Before that time, Unilever had a factory producing Blueband Magarine which was also part of the 41 items. And the managing director and the entire management team visited me in Abuja, asking that we grant the company some forbearance and I said there was not going to be any forbearance.”

“But they promised to re-establish that factory in Nigeria because the factory was dismantled in Nigeria and taken to another country. And he made a promise that within 12 to 18 months it will re-establish the factory in Nigeria. And based on that, we granted them some form of forbearance that made them to be able to import into Nigeria. But we were discussing. The managing director, Unilever Nigeria Plc., Yaw Nsarkoh, is a man of his word and that is why we are commissioning this factory today”, he added.

Emefiele explained that by re-establishing the factory, the company creates direct jobs for Nigerians and also creates indirect jobs because the company buys palm oil used to produce the product from Nigerians. “By doing that, the company feeds thousands and millions of people. We do not have foreign exchange to import products that can be produced in Nigeria. When they create jobs, they save the country foreign exchange. They are doing 10,000 metric tonnes per annum and promise to raise it to 50,000 metric tonnes per annum later,” he said.

Emefiele said:  ”The promise I have made to Unilever and other companies is that if there is any foreign investor that wants to re-establish companies that left the country, we will support them to do so. We are ready to support you because you are going to create jobs for the people. Creating jobs is not just the function of the government; private sector has to also play a major role.”

Managing Director, Unilever Nigeria / Ghana, Yaw Nsarkoh, said Unilever is a long-term investor, adding that when other companies were leaving the country, it was busy thinking of boosting its investment.

The factory has capacity to produce 10,000 metric tonnes of blueband magarine. There are plans to raise it to 50,000 metric tonnes. “We are building a competitive ecosystem. We want to empower Nigeria’s industrial base,” Nsarkoh said.

Vanguard with additional report from Nation