The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has said, the new apex bank would be refocused from direct development finance interventions into more limited advisory roles that support economic growth.
In a document obtained from the apex bank on Thursday, Dr. Cardoso said, much has been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.
He noted that “in refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth”.
According to him, these advisory roles could include, for instance: “Acting as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy.
“Facilitate new regulatory frameworks to unlock dormant capital in land and property holdings.
“Accelerate access to consumer credit and expand financial inclusion to the masses.
“De-risking instrumentation to increase private sector investment in housing, textiles and clothing, food supply chain, healthcare, and educational supplies. These verticals have huge demand patterns, with the potential for high local inputs and value retention, and can be the basis for rapid industrialisation.
“Exercise CBN’s convening power to bring key multilateral and international stakeholder participation in government and private sector initiatives’.
The CBN Governor listed some of the challenges facing the apex bank to include:
failure in corporate governance in CBN, Diminished institutional autonomy, Need to refocus CBN back to core functions, Unorthodox use of Ways and Means spending, Backlog of FX demand, Inflation and price stability, Access to FX market and FX price discovery, and Current Financial System Stability.
Cardoso emphasised that CBN does not have a magic wand that could be waved at the current economic challenges, adding that the problems facing the bank are large and complex.
However, he said, “with focused leadership and sustained reforms, it is expected that over time, the country will see gains open economic spaces, attract new investments, create employment, and give our hardworking and talented compatriots opportunity for a more prosperous future”.
On how a refocused CBN could support economic growth, Cardoso said, size matters.
He said, the economic policy proposals of the Administration identify a set of fiscal reforms and growth targets that would achieve $1.0 TN GDP within eight years.
He said, “in reviewing selected BRICS and MINT countries, with large populations and similar developmental characteristics as Nigeria, it is interesting to identify macro-economic indices that point to Nigeria’s economic trajectory, given the faithful implementation of the proposed economic reforms.
“In economies bigger than $1.0TN, these indicators include moderate inflation, sizable foreign reserves, and the capacity to quickly rebound from a cyclical economic downturn”, he said.
