Constituent policy

Non-oil sector growth is a major component of monetary policy

The Central Bank of Nigeria (CBN) has declared the promotion of non-oil sector growth is a major element of monetary policy.

This was revealed by Mr. Godwin Emefiele, Governor of CBN, represented by Director of Corporate Communications Department, Osita Nwanisobi, during the 33rd Seminar organized by CBN for Financial Correspondents and Business Editors on Saturday in Lagos, according to NOPE.

Emefiele said Nigeria was largely dependent on the oil sector for income generation over the past four decades. He therefore said that it was necessary to build a broad-based and well-diversified economy that would ensure overall macroeconomic stability.

What the CBN says

The CBN Governor said: The quest to build a more sophisticated economy and agricultural, micro, small and medium, industrial and manufacturing enterprises has become the major component of our monetary policy.

“Nigeria has largely depended on the oil sector for revenue generation over the past four decades, and the sustained decline in crude oil production has continued to hurt the performance of the economy.

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“Thus, there is an urgent need for a conscious effort to diversify into other non-oil sectors,” Emefiele added.

He said Nigeria stopped relying on rice imports once the Anchor Borrowers Program (ABP), the bank’s flagship program, was implemented. He went on to say that the CBN has helped commercial farmers in the country to participate in various value chains, including oil palm, cotton and cocoa, among others, through its agricultural credit program.

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He said the implementation of the 44 products that could no longer be imported in foreign currency showed the effectiveness of the bank’s continued support to manufacturing industry and MSMEs.

The new 100 percent policy on production and productivity, according to Emefiele, was beginning to produce high caliber results. He also said that the RT200 FX initiative was created to benefit from Nigeria’s substantial local production in other regional markets to stimulate foreign exchange inflows and promote exchange rate stability.

What you should know

  • According to the recent GDP report released by the National Bureau of Statistics for the second quarter of 2022, the non-oil sector increased by 4.77% in real terms during the reference quarter (Q2 2022). This rate was 1.97% points lower than the rate recorded in the same quarter of 2021 and 1.31% points lower in the first quarter of 2022.
  • This sector was driven in the second quarter of 2022 mainly by Information and Communication (Telecommunications); Swap; Finance and Insurance (Financial Institutions); Transport (Road Transport); Agriculture (crop production) and manufacturing (food, beverages and tobacco), representing positive GDP growth.
  • In real terms, the non-oil sector contributed 93.67% to the country’s GDP in the second quarter of 2022, higher than the share recorded in the second quarter of 2021 which was 92.58% and higher than the first quarter of 2022 recorded at 93.37%.