The Association of Professionals for Promotion of Civic Values (APPOCV), has said the recent economic policy introduced by the Central Bank of Nigeria (CBN), might lead to steep rise in headline inflation rate, turbulent foreign exchange market and sharp depreciation in the Naira value at the parallel market.
APPOCV made this submission in a statement made available to LEADERSHIP yesterday, signed by its president, Dr Kunle Ashimi.
It would be recalled that the CBN, recently reviewed its policy on the economy which drew diverse reaction from the populace with a large cross section condemning it.
The professionals noted that when Monetary Policy Rate (MPR), is increased, the following are bound to happen and their effect on the larger economy will also be felt as banks will increase their Prime Lending Rate.
APPOCV, however, advised the CBN to relieve the masses of some of the continued burden occasioned by her previously taken economic decisions to halt the increasing MPR as inflation hikes and reduce MPR by 200 basis points.
“Raise a medium term five to seven years industry stimulation bond well priced between 9 – 14 per cent to target agriculture value chain businesses and export related business such as extraction, processing, milling, storage and logistics.
“Design a collaborative framework between Bank of Industry (BOI), Bank of Agriculture (BOA) and CBN to issue the bond under a private equity company, listed on the NSE for transparency to manage the fund alongside commercial banks.
“Reduce the required liquidity ratio of banks by 10 per cent with a caveat on specific industry of target export, housing, agriculture and ensure full compliance. This will push some liquidity into the system.
“Just like CBN is quick to fine defaulting banks on regulatory infractions, the CBN should also openly celebrate banks that have displayed support for industrialization based on the portion of their balance sheet devoted to such course. A Presidential Award should be inaugurated for that along other fiscal and monetary incentives,” it added.