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Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has again assured that the apex bank will continue to take a proactive approach in easing any likely adverse effects on the economy from external pressures as he prepares for a second term as the head of the apex bank in June 2019.
Emefiele particularly promised that the apex Bank will promote policies that will enhance domestic production of goods that can be produced in Nigeria along with measures that improve the stability of the financial system.
Delivering the third in the university’s series of Eminent Persons’ Lecture at the University of Benin, Emefiele stressed the need for increased coordination between fiscal and monetary policies in deploying measures that will support economic growth and reduce unemployment.
At the event held on Wednesday, Emefiele passionately preached the message of economic patriotism, where he urged actors in the public and private sectors to look inwards in developing the Nigerian economy.
The governor urged Nigerians to think of what they can do to improve the fortunes of the Nigerian economy, rather than what they stand to benefit from the ailing system.
In his lecture titled: “Beyond the Global Financial Crisis: Monetary Policy under Global Uncertainty”, Emefiele noted that there was much potential within the Nigerian economy to developed it as many other countries, which were its peers at independence but had gone ahead.
He said the lecture was part of the Bank’s efforts at promoting research and collaboration with Universities, towards developing policies and programmes that will enhance the economic well-being of all Nigerians, as he highlighted how the crisis had helped to reshape monetary policy tools used by Central Banks to address dips in their economies.
Giving an overview of how central banks across different economic blocs responded to the global financial crisis, he noted that while the impact of the global financial crisis had little effect on the Nigerian economy, the drop-in commodity prices between 2014 – 2016, brought to the fore the limitation of conventional monetary policy tools.
According to him, “the 60 percent drop in crude oil prices between 2014 – 2016 along with normalization of Monetary Policy by the United States Federal Reserve Bank in 2014, imposed severe constraints on the Nigerian economy, given our reliance on crude oil for over 90 percent of our export earnings and 60 percent of government revenue.”
He explained that the CBN and the fiscal authorities, in an effort to contain the crisis, decided to deploy both conventional and unconventional tools to support continued growth of the economy, arguing that a simple focus on the Monetary Policy Rate would not have been sufficient to get the Nigerian economy out of the recession.
Explaining why the CBN dabbled into unconventional monetary policy measures to intervene in critical sectors of the economy, such as agriculture and manufacturing, he said it was necessary to promote growth in the economy and boost employment opportunities as pressures well as address the stability of the financial system and provide support against external pressures.
He reiterated the need to promote sustainable growth through the increase of policy buffers and a further diversification of the Nigerian economy away from oil.
He equally stressed the need for huge investment in infrastructure in order to enhance economic growth and provide cheap financing to boost the local production of priority goods in critical sectors of the Nigerian economy in order to reduce reliance on foreign imports.