Central Bank of Nigeria (CBN) - For President Muhammadu Buhari, the Central Bank of Nigeria (CBN) does not only deserve commendation for entrenching stability in the foreign exchange market and embarking on developmental initiatives that have helped to redirect the nation’s economy, it should be given more chance to do even. To that extent, the federal government has announced that beyond the intimidating success stories across key sectors of the economy - occasioned by the interventions of the CBN, it is partnering with the bank to create more jobs and empower more Nigerians.
“…a new presidential initiative is starting with each state of the federation creating a minimum of 10,000 jobs for unemployed youths, again with the aid of CBN’s development finance initiatives,” so announced by President Buhari in his independence speech yesterday. For the President, the initiatives of the CBN so far, are of outstanding success.
In the remarks to mark the 57th anniversary of Nigeria as a nation, President Buhari pointed to the CBN-initiated agricultural Anchor Borrowers Programme (ABP) that was launched in November 2015 as one of the pro-active ideas of the bank that are aiding diversification drive of the federal government. The joy is understandable. At the last count, 200,000 small holder farmers from 29 states of the federation are already benefiting from the N43.92 billion released through the CBN and 13 participating institutions to fund the agricultural programme.
Barely two-years of commencement of the ABP, President Buhari noted that 233,000 hectares of farmland cultivating eight commodities of Rice, Wheat, Maize, Cotton, soya-beans, Poultry, Cassava and Groundnuts, in addition to fish farming. The initiatives were undertaken in close collaboration with the states. “I wish to commend the efforts of the Governors of Kebbi, Lagos, Ebonyi and Jigawa States for their support to the rice and fertilizer revolutions. While commending the contributions of some state Governors including that of Ondo, Edo, Delta, Imo, Cross River, Benue, Ogun, Kaduna and Plateau for their support for the Presidential initiative for palm oil, rubber, cashew, cassava, potatoes and others crops, the President praised the steps of the CBN in rebalancing the economy.
On the President’s brag list is the fact that “Elsewhere in the economy the special window created for manufacturers, investors and exporters, foreign exchange requirements has proved very effective. Since April, about $7 billion has come through this window alone. The main effect of these policies is improved confidence in the economy and better investment sentiments.”
It was Mudashiru Olaitan who promptly noted in his contribution to a publication to mark the 40th anniversary of the CBN titled: “BULLION” that the overarching objective of an efficient financial system intermediation process is to stimulate sustainable economic growth and development. His position mirrors the interventions of the central bank in the Nigerian economy as apt approaches to solving economic challenges and putting the economy on the part of growth.
For clarity, the CBN is digging for gold in a more modest manner. The apex bank has developed economic models focused on the utilisation of massive capital injections to catalyse rapid Gross Domestic Growth (GDP) growth rates, which have aided growth and moderation in inflation rate.
The interventions of the central bank under the administration of Godwin Emefiele were acknowledged by President Buhari as major contributors to the recovery and growth of the Nigerian economy. Beyond its core mandate of creating the conducive environment for financial institutions to operate and thrive, the CBN is creating jobs for the teaming youths in the country.
‘‘Since December last year, this administration has produced over 7 million 50Kg bags of fertiliser. Eleven blending plants with a capacity of 2.1 million metric tons have been reactivated. We have saved $150 million in foreign exchange and N60 billion in subsidy. Fertilizer prices have dropped from N13,000 per 50Kg bag to N5,500,’’the President said in his broadcast yesterday.
Owing to the stabilisation in the Nigerian stock and foreign exchange markets, Nigeria has recorded 7 consecutive months of lower inflation, Naira rate is beginning to stabilize, appreciating from N525 per $1 in February this year to N360 today. Broad-based economic growth is leading us out of recession.
The intervention by the CBN in the real sector is expected to continue to yield positive results in terms of output and lower consumer prices. For many, the CBN is helping in no small measure to build confidence in the federal government.
The central bank is not resting on its oars. In a communiqué at the end of its meeting last week, the Monetary Policy Committee restated its commitment to maintaining stability in prices, without which meaningful recovery cannot be achieved.
There is now a new trend towards convergence between the rates at the bureau-de-change (BDC) and the Nigeria Autonomous Foreign Exchange (NAFEX) segments, as well as the stability of the exchange rate at the inter-bank segment of the foreign exchange market during the review period. The success of the Investor and Exporters’ window (I &E) of the foreign exchange market and traced this not only to foreign investor confidence but also to the zeal and commitment of Nigerian exporters who have demonstrated preference for the window to the parallel market.
For instance, the MPC observed that the I&E window has increased liquidity and boosted confidence in the market with over US$7.0 billion inflow in the last five months. The Committee will continue to introduce policies that will improve the confidence of foreign investors in the country’s macroeconomic management regime.
While commending the gradual narrowing of rate spreads in the foreign exchange market, members of the committee urged the central bank to continue to monitor and respond proactively to threats and vulnerabilities in the foreign exchange market.
The Committee believes that the economy can be stronger. In line with that believe, the members urged increased momentum in expenditure directed at the growth-stimulating sectors of the economy in order to reduce youth unemployment and restiveness, even as it welcomed the steady implementation of the 2017 Budget, especially, the capital component of the budget.
Experts view that there is an emerging cohesion between fiscal and monetary policies with a common objective of driving the economy forward, while calling on the fiscal authorities to brace up for speedy and effective implantation of the 2017 budget and the Economic Recovery and Growth Plan (ERGP)
Source:
Leadership