CBN’s 5-year roadmap: Emefiele targets double digit-growth

Governor of Central Bank of Nigeria (CBN) Godwin Emefiele Monday unveiled the policy direction of his new five-year tenure, promising to facilitate 95 per cent access to financial services, double digit-growth and bank recapitalisation among others.

The CBN boss also said the nation’s external reserves had risen from 23 billion dollars in October 2016 to over 45 billion dollars by June.

While acknowledging much was still left to be achieved from a similar agenda set in July 5, 2014, due to various challenges, Emefiele said he was confident the apex bank would meet Nigerians’ expectations in the next five years.

He reviewed the achievements and challenges of the CBN in his first tenure, saying with increased consultation and cooperation with the fiscal authorities and other interest groups, the agenda would be realised.

The vision of the bank under his management for the next five years, he said, would be to work closely with the fiscal authorities to target a double-digit growth; bring down inflation to single digit; and accelerate the rate of employment.

He said this at a media parley to unveil his plan for the next five years as the bank’s helmsman.

“Put succinctly, our priorities at the CBN over the next five years are the following; First, preserve domestic macroeconomic and financial stability; Second, foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians thereby raising the financial inclusion rate in the country; Third, continue to work with the Deposit Money Banks to improve access to credit for not only small holder farmers and MSMEs but also consumer credit and mortgage facilities for bank customers. Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry,” Emefiele said.

He said the CBN during the period would encourage the deposit money banks to direct more focus in supporting the education sector, grow the country’s external reserves, and support efforts at diversifying the economy through CBN intervention programmes in the agriculture and manufacturing sectors.

On macro-economic stability, he said over the next five years, emphasis would be on supporting improved gross domestics product (GDP) growth and greater private sector investment.

Emefiele said, the CBN intends to leverage monetary policy tools in supporting a low inflation environment, while seeking to maintain stability in exchange rate.

He said decisions by the Monetary Policy Committee on inflation and interest rates would be dependent on insights generated from data on key economic variables.

The CBN boss said he would also strive to continue to sustain a positive interest rate regime.

Monetary policy measures, he said, would be geared towards containing inflationary pressure and supporting improved productivity in the agricultural and manufacturing sectors.

To bring down the cost of food items, which have considerable weight in the consumer price index basket, Emefiele said the bank would work with other interest groups towards that objective.

“Our ultimate objective is to anchor the public’s inflation expectation at single digit in the medium to long run.

“We believe a low and stable inflationary environment is essential to the growth of our economy because it will help support long term planning by individuals and businesses,” he said.

External reserves

On the nation’s external reserves, he said: “I am delighted to note that our external reserves have risen from 23 billion dollars in October 2016 to over 45 billion dollars by June.  “Inflation has also dropped from 18.72 per cent in January 2017 to 11.40 per cent in May. “Our CBN purchasing manufacturers index has risen for 26 consecutive months since March 2017, indicating continuous growth in the manufacturing sector.

“As a result of measures implemented by the CBN which improved access to raw materials and finance for manufacturing firms GDP growth has risen for seven consecutive quarters following the recession. “And, our exchange rate has appreciated from over N525/$1 in February 2017 at the Bureau De Change window to N360/$1.

“With improved inflow of foreign exchange, the exchange rate has remained stable around N360/$1 for the past 27 months.”

Exchange rate 
On exchange rate stability, the CBN boss said the bank would continue to operate a managed float exchange rate regime, to reduce the impact the continuous volatility in the exchange rate could have on the country’s economy.

He said the CBN would support measures to increase and diversify Nigeria’s exports base and ultimately help in shoring up the country’s foreign reserves.

Nigeria, he said, remained committed to a free trade regime mutually beneficial; but, particularly aimed at supporting our domestic industries and creating jobs on a mass scale for Nigerians.

Consequently, he said, the CBN intends to aggressively implement its N500 billion financial support facility to boost the growth of the non-oil exports and improve non-oil export earnings.

To achieve financial system stability, Emefiele said a resilient and stable financial system was imperative for continued growth of the country’s economy given the intermediation role of  financial institutions, to support the needs of individuals and businesses.

“In the next five years, we intend to pursue a programme of recapitalising the banking industry to position Nigerian banks among the top 500 in the world.

“Since the former CBN Governor, Professor Chukwuma Soludo undertook the bank recapitalisation in 2004, several challenges have surfaced showing that the programme is now weak and needs reinvigoration,” he said.

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