Nigeria’s Efforts To Increase Local Production And Naira Value
The drop in oil prices has had great impact on Nigeria’s foreign reserves. From June last year till June 2015, our reserves have been down with about $6 billion. The Central bank has continued to bring out policies to stop a depletion of the foreign reserves. This includes the recent prohibition of certain items and availability to access FX in the foreign markets. This policy stops some items from accessing FX and this will effect a reduction in demand on the currency, drive the manufacturing sector and have a global impact on the economy.
This policy has had a positive impact on the country’s foreign reserves as earlier revealed by the CBN Governor, Mr Godwin Emefiele that the country’s external reserves had risen to $31.89billion as at the 7th of July.
Chizoma Okoli, Head Corporate Banking Directorate at Diamond Bank, said there have been a lot of policies to increase local production. As in the case of rice, the government gave incentives for rice importers who had mills importation at 30% duty which encouraged the intensity of efforts in local production. For those who do not have mills, their cost of production will reduce and there will be an increase in fund requests to banks. ‘The general expectation is that a lot of companies will begin to focus on backward integration.’