Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has welcomed the endorsement of CBN’s tight monetary policy stance by IMF and declared that
CBN will continue to focus on moderating inflation
Mr. Emefiele however assures Nigerians that CBN will continue to focus on the continued supervision of Nigerian banks to make them resilient.
Emefiele pledges regulatory framework to support fiscal policy measures aimed at boosting growth in the Nigerian economy.
Mr. Emefiele made this statement at the ongoing World Bank Group (WBG)/International Monetary Fund (IMF) Spring Meetings in Washington DC, the United States (U.S.), on Friday.
In his words; “We are delighted that even in Sub-Saharan Africa, the growth levels in Nigeria, even though by our assessment is still sub-optimal, that the IMF would among all the countries in Africa, say that growth in Nigeria should be retained at 3.2 per cent, gladdens our heart.
“It means we are doing certain things that are correct and we’ll continue to do those things that are right. But it also means that we are not going to remove our eyes on monetary policy, which is to focus extensively on how to moderate inflation, but at the same time, ensure that banking system stability remains resilient and strong as it is right now.”
On the recent collapse of Silicon Valley Bank and Signature Bank in the U.S. which his significantly heightened concerns of a likely global banking crisis.
Mr. Emefiele, assures that regulators in Nigeria would continue to keep their eyes on banking system stability, through monitoring and supervision of financial institutions.
He also restated that the support of CBN’s tight monetary policy by the IMF was a testament to the fact that the Central Bank was doing the right thing.
“So, the focus remains that monetary policy and monetary authorities must continue to focus on inflation so as to continue to bring it down. While monetary authorities are doing their work, to bring down inflation, they must also keep their eyes on banking systems’ stability, through monitoring, supervision, and regulatory frameworks and the rest of them”.
On fiscal policies; the Nigerian CBN Governor said: “For the fiscal of course, because of the limited fiscal space, the IMF insists that countries need to reduce their spending but, in my case, I will say well, if you want to spend, then raise revenue to be able to spend.
“I think it’s important that you must raise revenue and not get yourself constrained in an environment where there is no debt, where financial market conditions are very tight and very limited, and where interest rates are high and could create a lot of burden for economies and the only option for fiscal in this case is to expand the revenue base so as to be able to spend
Commenting on the general overview of the one-week Spring Meetings,
Mr. Emefiele, while reviewing the one week Spring Meeting of the International Monetary Fund/World Bank; averred that the focus of the gathering of policymakers across the globe, was to proffer solutions to address the food crisis, rising poverty and global inflation as well as other pertinent issues.
His words; “the forecast at the meeting remains that Yes, a lot of work has been done in 2022, and growth is gradually returning again, but it is still at the sub-optimal level. Inflationary pressures continue and even though inflation is coming down as a result of measures being taken by monetary authorities to bring down the inflation rate, it still remains at very high levels globally to the extent that even as global inflation is projected at seven per cent, it remains very high.
“And the high point of all the consequences of what we’ve seen in 2022 is that poverty, which was very well discussed here, has risen quite astronomically globally and over 700 million people are being struck by poverty.
“Food insecurity has also risen quite tremendously to the extent that over 350 million people globally are hit by extreme food crises all over the world.”
Mr Emefiele stated further that the rise in global debt was causing a funding squeeze, adding that multilateral organisations were becoming restraint to lend to countries in need of loans.
Even the IMF themselves, he stated, also talked about the fact that even the debt portfolios and lending portfolios have reached all-time highs.
In two decades, he lamented that this is the highest level of debt portfolio that the IMF has seen in its books and unfortunately, warning that they may not be in a position to do much for countries that really require more debt to be able, to restructure the balance sheet and then and then keep going on, he added.
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