By Anayo Ezugwu

THE Central Bank of Nigeria, CBN, has said that the ongoing global economic protectionism will help Nigeria’s local economy. Godwin Emefiele, the governor, CBN, said the policy will spur the domestic economy for enhanced local production.

Speaking at the 26th Seminar for Finance Correspondents and Business Editors, in Lokoja, Kogi State, Emefiele said protectionist policies will discourage dumping in the country’s economy and protect domestic industries from foreign competition. He said countries had used trade protection repeatedly as a policy to resolve negative perceptions and shocks in their respective countries.

Emefiele, who was represented by Moses Tule, the director, Monetary Policy Department, CBN, said it was this policy that made Nigeria to introduce restriction of official foreign exchange for the importation of 41 items. He said it was an eclectic policy carefully crafted with a view to reversing the multiple challenges of dwindling foreign reserves, contracting GDP-recession and an embarrassing rise in the level of unemployment confronting the economy.

According to him, the implementation of the 41 items, in addition to the other complementary macroeconomic policies, no doubt, was effective in lifting the Nigerian economy out of recession.

“Given these salutary effects on the economy; it can be argued that the stance of Classical economists argued that trade protectionism notwithstanding, to override  the utility of selective protection in form of the 41 items to resolve the challenges facing the economy can hardly be overemphasized. Pragmatic economic nationalism therefore, would ordinarily vote in favour of protecting the domestic economy, as long as it does not infringe upon the tenets of “beggar-thy-neighbor” policies.

“In perspective, it is important that we address the origin of the recent wave of global protectionism across the globe. Since the Great Depression, the Global Financial Crisis of 2008 is widely known to be the most significant setback for the global economy. The aftermath of the crisis has highlighted governance issues which have impacted on the financial sector with significant implications for international trade.

“The great trade collapse which resulted from the crisis also reflected the policy choices of countries deeply integrated into the global trading system which shifted their trade policy orientation from an era of free trade to the adoption of protectionist measures in an effort to cushion the effects of the crisis on their domestic economies. Interventions such as import restrictions, export subsidies, and anti-dumping measures are examples of “beggar-thy-neighbor” policies adopted by countries, which have weakened the liberal global trading system. However, while many countries have appealed against such measures, not all have done so,” he said.

– Oct. 24, 2018 @ 17:07 GMT