A Nigerian based independent think tank and research organization,Pol Eco Analytics,said its strongly believe that Central Bank of Nigeria (CBN) under the leadership of Dr Michael Olayemi Cardoso can seize the opportunity to implement quality monetary policy to grow the Nigerian economy by initiating critical monetary reforms to address macro and microeconomic imbalances, foreign reserve challenges, robust FX management and guarded interventions in the real sector and sub sectors of the nation economy.
Pol Eco Analytics expressed hope that the window of opportunity of Dr Cardoso appointment as the Governor of the apex bank along sides his Deputy Governors could have a transformative impact on the lives of millions of Nigerians and establish a solid monetary foundation for sustainable and inclusive financial growth.
“However, the Nigeria economy performance within the first quarter of 2023 economic growth weakened, and real gross domestic product (GDP) growth fell from 3.3% in 2022 to 2.4% year-on-year (y-o-y) in Q1 2023. On the other hand real gross domestic product (GDP) improve slightly in growth to 2.51 % in Q2 2023 lower than 3.54% recorded in Q2 of 2022.This could be attributed to the challenging domestic and global economic conditions being experienced that has put pressure on Nigeria’s economy.
“Instructively, the Nigerian economy cannot afford the current persistently high double digit general inflation of 25% with food inflation at a staggering 29%, macroeconomic instability, low investment drive , sluggish economic growth, escalating poverty 64% and fragility that have compounded unemployment at 37%.
“In this regards, as a matter of national priority, Pol Eco Analytics as a stakeholder in the Nigerian economy and development project, believes domestic policies in the form of quality monetary policy from the CBN can play a major role in improving Nigeria’s economic performance, bring significant growth and buffers against any external shocks.
“Consequently, Pol Eco Analytics having carefully observed the Nigeria economy development, particularly from the angle of CBN monetary policy actions currently and in the past. Notice that the CBN would need to carry out a monetary management reforms that are crucial,as a measures to rebuilding the nation monetary space to restore the naira value, macroeconomic stability, and the financial sector value creation.
“Reason be that CBN in recent passed failed to welcome a bold monetary action, even when it did in the form of ‘Heterodox thinking’ the apex bank could not maintain the momentum of deepening and sustaining these changes that is imperative to enable nation break out of the cycle of monetary conundrum that distort the economy.
“For instance, the Unification of the FX windows was to help improve the efficiency of the FX market, unlock private investment, and reduce inflationary pressures. Sadly, this goals have not been realize or yielder the needed result.
“Similarly previous monetary, and exchange rate policies, including the naira redesign program, incessant interest rate hiking did not deliver the desired improvements toward economic growth,neither reduce inflation, or help to generate employments in the country. As promised by the former manager’s of the apex bank.
“Rather, such policies lead to internal and external vulnerabilities, debt imbalances, erode investors confidence in our economy, and at the same time derailed the CBN 27 interventions programmes in the economy, as well as in the foreign exchange market.
“Equivocally, Pol Eco Analytics is convince that it is critical to implement a comprehensive monetary reform package that encompasses a range of complementary measures, including a goal to strengthen the forex unification and CBN I&E Window policy toward drastic elimination of multiple forex market and mitigate currency speculation, round tripping and insider abuses that put undue pressure on the naira.
“In addition, is a well structure strategic support to the real sector and sub sector through compact measures to protect the manufacturing sector, MSMEs and cottage industries. In order to maximize the collective impact on growth, job creation, and poverty reduction in the nation.
“At the same time it is crucial to complete this important reform by reviewing the 41 ban items on FX restrictions, by rethinking it broadly has a retooling process of supporting local manufacturing of these 41 items here in Nigeria. This would go a long way to redirect available forex to priorities needs and concerns.
“Yet still, the CBN should seize the opportunity to implement a robust strategic communication in sensitizing the general public as how this reform would impact on the monetary, fiscal and trade policies of the nation.
“While Pol Eco Analytics acknowledged the fact that, the CBN Act of 2007 has duly spell out the roles of the CBN in the economy, and essentially outlines the functions of the CBN Governor and his deputies. We urge the Governor to strictly abides in obedience to the CBN 2007 Act and align himself to due process and transparency in discharging his duties by avoiding the nation political waters.
“In this light, the new CBN Governor must recognized the need to chart a new course and must endeavor to link this critical reforms with improving fiscal and trade policies of the federal government, that would strategically lead to export oriented economy”.
Pol Eco Analytics therefore called on the reserved bank of the nation to create enabling environment for concurrent financial inclusiveness, that are devoid of ad hoc and cosmetic programmes that would not be avenue for corruption and misappropriations of public funds. As a timely and crucial departure from what was obtained in the past.
