NIGERIA: ONE-THIRD OF THE GLOBAL ECONOMY IN RECESSION -EMEFIELE

According to Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), around one-third of the global economy is currently experiencing a recession as a result of the COVID-19 pandemic's negative impacts and the ongoing conflict between Russia and Ukraine.

At a meeting with House Speaker Femi Gbajabiamila Tuesday in Abuja, Emefiele addressed stakeholders in the areas of foreign affairs and aviation.

Additionally, he pointed out that the bank is utilizing unconventional methods, or what he called the RT 200 strategy, to scoop up foreign cash and boost the Naira and, consequently, the economy.

The head of the CBN claims that the RT 200 is a policy that focuses on the rates of non-oil export revenues being returned to the Nigerian economy, which is expected to be close to $1 billion in the third quarter of 2022.

The situation is a global problem. In fact, I can declare right now that the world's future is becoming gloomier due to a worsening global downturn.

Today, the world economy is under recession to a greater than one-third extent. The incidence of unemployment is on the rise across the globe. In fact, growing inflation is a problem for the majority of the world's nations. As a result, the USA decided to increase rates by approximately 3.75 percent in 2022 just this year.

This has led to significant inflation pressures and currency depreciation in other nations.

“Since February of this year, the CBN has implemented the RT 200 initiative to promote the repatriation of forex earnings from non-oil exporters. We are happy that the initiative is succeeding. We were only able to witness repatriation during the first six weeks of the project in February and March, and we had to pay roughly $62 million in refunds. In the second quarter, non-oil export revenue increased dramatically to $622 million. We have seen almost close to $1 billion for the third quarter, ”added Emefiele.

The head of the CBN was commenting on the $700 million in stuck cash of foreign airlines, which had threatened to stop flying to Nigeria as of October 28 if nothing was done by the government to clear the backlog.

Contrary to the assertion made by the IATA representative, who claimed that nothing had been done to alleviate the backlog, Emefiele informed the crowd that $265 million had been set aside for distribution to the international airlines through their respective banks.

In addition to the FX priority we have always given airlines, on August 31st I decided to exercise our discretion to give $265 million to the foreign airlines.

We spent $110 million immediately and the remaining sum 60 days later. On that day, we allocated $32 million to IATA through UBA, $22.8 million to Qatar Airways through Standard Chartered, $19.6 million to Emirates through Access Bank, $5.5 million to BA through GTB, $4.8 million to Virgin Atlantic through Zenith, and so on.

How then are they supposed to start complaining that they haven't gotten their money？ This is in addition to the purported 8 or 10 percent that you claim to be receiving, Mr. Fatokun (referring to the IATA representative).

“We utilize our discretion to grant you this additional funding, and I have personally assured you that we will keep doing so in order to appease you and stop your continued extortion of this nation. On October 31st, $120 million of that would be due. The money would be transferred. What else are you asking me to do？ I have to admit that there would be a delay. Ladies and gentlemen, despite claims to the contrary, I can print Naira but not dollars. It must be earned or borrowed. All of the issues we're discussing come down to reciprocity, and IATA cannot duck that,” said he.

In order to lessen the burden of future accumulating funds, he also urged other foreign nations to authorize Nigerian airlines to fly their routes.

The meeting was called at the request of Femi Gbajabiamila, Speaker of the House of Representatives, who had earlier informed the group that the House had serious concerns about the blocked or trapped funds of foreign airlines and that this forum was necessary to find long-term solutions while keeping in mind the current economic imperatives.

Sen. Hadi Sirika, the minister of aviation, reminded the audience that “under President Muhammadu Buhari, Nigeria has demonstrated the ability and audacity to rise up in trying circumstances to do the right thing to serve the country.”

According to him, there were around $480 million blocked in Nigeria in 2016 when we came in; we were in a recession and revenues had decreased. The CBN Governor just said that we may either earn it or borrow it. We had not even begun borrowing at that point. So, we went to Mr. President and told him about our situation. He also requested that the CBN Governor and the Minister of Finance fix the issue, which they did.

In order to guarantee that the problems will be resolved, our nation has shown that it is capable of responding, even in trying circumstances, to things that are duties upon us.