12th October, 2023
By Kadiri Abdulrahman
CBN governor, Mr Yemi Cardoso, says the economic policy proposals of President Bola Tinubu’s administration can achieve a GDP of one trillion dollars in eight years.
Cardoso made the declaration in Marrakesh, Western Morocco, on Thursday on the sidelines of the on-going 2023 World Bank/IMF Annual Meetings.
He said efforts were on-going to refocus the CBN for overall economic growth, adding that the government would identify fiscal reforms and growth targets that would achieve the feat within eight years.
He said that in a study of emerging markets, macro-economic indices pointed to Nigeria’s economic trajectory, given the faithful implementation of the proposed economic reforms.
He explained that the study followed a review of economies like Brazil, Russia, India, China, and South Africa (BRICS) and Mexico, Indonesia, Nigeria, and Turkey (MINT), countries with similar populations and developmental characteristics as Nigeria.
“In economies bigger than 1.0 trillion dollars, these indicators include moderate inflation, sizable foreign reserves, and the capacity to quickly rebound from a cyclical economic downturn.
“Given this, a refocused CBN will better serve Nigeria through monetary policy interventions and advisory roles that sustain implementation of the administration’s fiscal proposals,’’ Cardoso said.
He said also that the lines between monetary policy and fiscal intervention should be clearly delineated, and the CBN needed to be pulled back from its development financing initiatives to more advisory roles.
“Much has been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.
“In refocusing the CBN on its core mandate, there is a need to pull it back from direct development finance interventions into more limited advisory roles that support economic growth.
“The bank should act as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy.
“It should facilitate new regulatory frameworks to unlock dormant capital in land and property holdings,’’ he said.
Cardoso listed other roles of the CBN to include accelerating access to consumer credit and expanding financial inclusion for the masses.
He added that the bank should de-risk instrumentation to increase private sector investment in housing, textiles and clothing, the food supply chain, healthcare, and educational supplies.
It should exercise its convening power to bring key multilateral and international stakeholders together for participation in government and private sector initiatives, he said.
Cardoso admitted that the CBN did not have a magic wand that could be waved at Nigeria’s current economic challenges, as the problems facing the bank were large and complex.
He listed the challenges as including failure in corporate governance, unorthodox monetary policies and foreign currency management, unorthodox use of Ways and Means spending, and a backlog of FX demand.
“The bank has to establish how much of the FX backlog is real and how much is given to speculation or hoarding.
“It has to identify creative financing options for clearing the short- to medium-term backlog.
“These problems need in-depth review by the new CBN leadership team to determine what mechanisms are currently working, what can be tweaked or dispensed with, and what new tools need to be introduced.
“It has to examine how issues of governance could be addressed,’’ he said.
Cardoso stressed that with focused leadership and sustained reforms, however, “it is expected that over time, Nigeria will see gains and the opening of economic spaces.
“The country will also attract new investments, create employment, and give its hardworking and talented people the opportunity for a more prosperous future.’’
The CBN governor also expressed President Tinubu’s commitment to urgently clean up the CBN and its monetary policies.
“As a first step, Mr. President’s appointment of a special investigator into the affairs of the CBN went underway recently.
“Further to the clean-up exercise, the president brought in a new leadership to the helm of affairs at the CBN,’’ Cardodo said.