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How Emefiele Pumped ₦10tn Into Economy Through Quasi-Fiscal Activities – Cardoso
The Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has said that the apex bank will be asking Deposit Money Banks to increase their capital base in order to service the $1tn economy projected by President Bola Tinubu.
Speaking on Friday at the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria in Lagos where he was the special guest of honour, Cardoso said, “In my recent speech at the 370th Bankers’ Committee meeting, I highlighted the economic agenda of the President. The administration has set an ambitious goal of achieving a GDP of $1tn over the next seven years.
“Attaining this target necessitates sustainable and inclusive economic growth at a significantly higher pace than current levels. It is crucial to evaluate the adequacy of our banking industry to serve the envisioned larger economy.
“It is not just about its current stability. We need to ask ourselves, can Nigerian banks have sufficient capital relative to the finance system needs in servicing a $1tn economy in the near future, in my opinion, the answer is no, unless we take action. As a first test, the central bank will be directing banks to increase their capital.
He also blamed the recent negative perception of the apex bank on corporate governance failure, diminished independence and deviation from the core mandate, inefficient forex rules, and venture into development financing.
He added, “The removal of petrol subsidy and the adoption of a floating exchange rate and other government policies are anticipated to have a positive effect on the economy in the medium term.
“These measures are expected to enhance investors’ confidence, attract capital inflow, stimulate domestic investors and ultimately improve the level of external reserves. Additionally, they are expected to contribute to the stability of the local economy.
“Despite the challenging global and local economic environment, Nigeria’s financial sector has demonstrated resilience in 2023 with key indications of financial soundness largely meeting regulatory benchmarks.
“Stress test conducted on the banking industry also indicates its strength under mild to moderate scenario on sustained economic and financial stress. Although there is room for further strengthening and enhancing resilience to shocks. Therefore, there is still much to be done in fortifying the industry for future challenges.”
Cardoso also noted that the previous forex ban on those 43 items widened the gap between official and parallel market rates.
Speaking on the activities of the CBN before his appointment, Cardoso stated that the quasi-fiscal policies of his predecessor, Mr Godwin Emefiele, resulted in N10tn being pumped into the economy through intervention programmes.
He said,”I am aware that events over the past few years have also put the CBN in a bad light. These issues can be attributed to various factors, such as corporate governance failures, diminished institutional autonomy of the Central Bank of Nigeria, a deviation from the core mandate of the Bank, unorthodox use of monetary tools, an inefficient and opaque foreign exchange market that hindered clear access, a foray into fiscal activities under the cover of development finance activities. There was also a lack of clarity in the relationship between fiscal and monetary policies, among other challenges.
“Hitherto, the CBN had strayed from its core mandates and was engaged in quasi-fiscal activities that pumped over N10tn into the economy through almost different initiatives in sectors ranging from agriculture, aviation, power, youth and many others. These clearly distracted the bank from achieving its own objectives and took it into areas where it clearly had limited expertise.”
The apex bank boss however promised that the issues affecting the bank would be tackled under his watch.
He said, “Under my leadership, the Central Bank of Nigeria will vigorously address these issues. We will tackle institutional deficiencies, restore corporate governance, strengthen regulations, and implement prudent policies. We assure investors and the business community that the economy will experience significant stability in the short-to-medium term as we recalibrate our policy toolkits and implement far-reaching measures.”
The Federal Road Safety Corps (FRSC), Anambra State Sector Command, has confirmed the death of a woman in an accident at Okpoko Market on the Asaba-Onitsha Road.
The Sector Commander, Mr Adeoye Irelewuyi, who confirmed the accident to journalists in Awka on Thursday, said that the woman was hit while she was crossing the road.
He said that the accident, which occurred on Wednesday, involved a commercial tow truck with registration number XA550BMA.
“Eyewitness report reaching us indicates that the truck was towing a vehicle in an uncontrollable speed along the axis.
“The vehicle that was being towed got detached from the tow truck.
“It hit and killed a female adult, who was said to be crossing the road, while the tow truck continued its movement.
“FRSC rescue team came to the scene and took the woman to Toronto Hospital, Onitsha, where she was confirmed dead and her body deposited at the hospital’s mortuary,” he said.
While sympathising with the family of the dead, the sector commander urged motorists, especially tow truck drivers, to exercise a high level of professionalism.
He also urged the drivers to always use standard equipment and avoid speeding.
The Chairman, Poultry Association of Nigeria (PAN), Lagos State Chapter, Mr Mojeed Iyiola, said the state government’s maize palliative to members of the association made a positive impact on the sector.
Iyiola said this in an interview with the News Agency of Nigeria (NAN) on Thursday in Lagos.
“We received about 150,000 tons of maize in February from the Lagos State government as palliative to cushion the effect of high feed prices.
“The major benefit of the palliative is that it actually cushioned the cost of production for most poultry farmers in the state.
“The palliative was beneficial as it made the cost of some poultry produce, especially eggs to drop,” Iyiola said.
He noted that prior to the palliative, a crate of egg was sold between N3,500 and N3,700 at the farm gate, but after the palliative, it now sells between N3,200 and N3,400.
According to the PAN chair, retailers and middlemen who sell from N3,800 to N4,200 do that for their personal gain.
“We have urged our members to sell their eggs at reasonable prices following the receipt of the palliative from the government.
“We appreciate the Lagos State government for the palliative but we also urge the federal government to do likewise, to further reduce the cost of production in the sector.
“This will consequently lead to drop in the prices of all poultry produce across board,” he said.
He said the palliative was shared among financial members of the association at no extra cost.
“As an association we shared the grains equally across PAN’s eight zones in the state equally. We also mandated each zone not the sell even a grain of the maize.
“We, however, considered new poultry farmers who wanted to the join the association as beneficiaries of the palliative,” said Iyiola.
He noted that through the palliative, more poultry farmers were recruited into the association.
“The maize was shared only to poultry farmers and not feed millers, it is the major component of poultry feed formulation,” he said.
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