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CBN, Emefiele In IMF’s Assessment



CBN Governor, Godwin Emefiele

In the last five years, the Central Bank of Nigeria (CBN), on the watch of the eminent banker, Godwin Emefiele, has played a dominant role in the development and expansion of the economy in addition to its traditional functions of enunciating monetary policies and ensuring financial systems’ stability.

Through its various policy thrusts, the apex bank has continued to impact on agriculture using the instrumentality of the Anchor Borrowers’ Programme and creating huge number of jobs and reducing the nation’s food import bill. Also adopting other intervention policies, agro- industry and agro-processing activities have enabled Nigerian farmers to add value to the commodities they produce thereby eliminating the country’s perception as a net exporter of agro-products.

In the process, the Micro Small and Medium Enterprises (MSMEs) have been dared to rediscover themselves, especially with the removal of 43 items from the official foreign exchange window. Still as part of its determined effort to rebuild the economy and put it on a path of sustainable growth, the CBN has had to formulate tough economic measures to check inflation, stabilise the Naira and put the economy on a right footing. Under Emefiele, the CBN introduced multiple forex system, created the Inter-bank/wholesale, invisible, Small and Medium Enterprises (SMEs) and the Investors/Exporters’ windows. These have brought stability to the forex market.

The Bretton Woods institutions, World Bank and the IMF, at their just concluded Spring Meeting in Washington D.C. the United States of America, endorsed the CBN’s monetary policy and acclaimed it as appropriate for the Nigerian economy at this time and urged the apex bank to enhance communication so as to improve the policy framework.

In the opinion of this newspaper, this glaring endorsement by the IMF is obviously a vindication of the decision of the governor and his team to take the risk of diversifying the mandate of the bank to strengthen Nigeria’s financial system and support the growth of the economy.

By adopting critical control initiatives, the CBN has been able to hold inflation down and ensure rise in Gross Domestic Product supported by progress in the non-oil sector. Inflation has been on the decline since the last quarter of 2017 and further declined to 11.31 per cent in February 2019 from 11.37. According to experts, this has impacted positively on food inflation, which declined to 13.47 per cent in February 2019 from 13.51 per cent in January 2019, while core inflation declined marginally to 9.80 per cent down from 9.91 per cent in the previous month.

The apex bank’s intervention in the real sector and the foreign exchange market has led to further growth in the manufacturing sector buoyed by an effective implementation of the Economic Recovery and Growth Plan (ERGP) by the Federal Government which has also encouraged the inflow of Foreign Direct Investments (FDIs) into the country just as they have formed the major drivers of the economy.

The World Bank also pointed out that growth of the Nigerian economy reached 1.9 per cent in 2018, up from 0.8 per cent in 2017, reflecting a modest pick-up in the non-oil economy. The role of the CBN, in our view, has been critical to the economic push that exited the country from recession. Now that the economy is gradually recovering, it is at a delicate stage where consolidation is key.

Emefiele said this much after the last Monetary Policy Committee (MPC) meeting during which he emphasised that the economy was at risk of slipping back into recession unless certain measures are taken to stimulate growth. He stressed the pertinence of an effective implementation of the budget and policies that would encourage credit delivery to the real sector of the economy. These, he maintained, are needed to boost aggregate demand, stimulate economic activity and reduce unemployment in the country.

The MPC also urged government to take advantage of the current rising trend in oil prices to rebuild fiscal buffers, strengthen government finances in the medium term and reverse the current trend of decline in output growth. The committee also called on the fiscal authority to intensify the implementation of the Economic Recovery and Growth Plan to stimulate economic activities, bridge the output gap and create employment.

We are impressed that CBN in the first term of Emefiele has imbued tremendous hope that is guaranteed to grant the Nigerian economy sustained rise. However, we are worried that the nation, infamous for its predilection towards policy inconsistency, may relapse into old ways of doing things that have not help the country much. This shifty tendency in policy formulation and implementation is as a result of the flux in the personnel that drive policies. Without pre-empting the President, the CBN, in the last five years has proved to be made up of a winning team. It is from this perspective that we suggest that change must not be made just for the sake of it.


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