The new Cental Bank of Nigeria governor, OLayemi Cardoso has stated how Tinubu’s administration will address Forex scarcity, and inflation in the country.
The Senate on resumption of plenary on Tuesday confirmed the nomination of Olayemi Cardoso as the Governor of the Central Bank of Nigeria. Four other nominees of President Bola Ahmed Tinubu for the offices of Deputy Governors of the apex bank were also confirmed. They included, Mrs Emem Nnana Usoro, Mr Muhammad Sani Abdullahi Dattijo, Mr Philip Ikeazor and Dr Bala M. Bello.
Addressing the gathering of Senators on the floor of the Red Chamber, Cardoso promised to restore the CBN to its core functions.
“A refocused CBN will better serve the country. In restoring the CBN to its core mandate, we must limit CBN to its advisory role and facilitate new regulatory framework,” he said.
Giving an insight into how he will mitigate the free fall of the Naira as against the Greenback, Cardoso highlighted what he called short term and long term measures to address both the devaluation of the Naira and the rising inflationary trend.
He said:” On the issue of foreign exchange which everybody has been talking about is very worrisome. It goes without saying that for the sort of country we want we need to have an exchange rate that is very stable . For a country that we all dream of we need to have an exchange rate that is stable
There are short and medium term measures
“The major short term measure has to do with balance of payments over a period of time like the sort of things that are being done already with respect to ensuring that you are getting more Petroleum Resources and diversifying the economic base of the country. That I believe will continue by the present administration and of course it will take time I think we should take that as a medium.
“The more immediate is what you need to look at . Number one, is what I call operational issue.
“We are aware that there are unsettled obligations by the CBN. Whether it is N$4b, N$5b or N$7b, I don’t know but definitely the immediate priority is to ascertain the extent.
“We need to find a way to take care of that. It will be naive for us to be expecting to succeed if we are not able to handle that side of the foreign exchange market
“Secondly, we have to be transparent so that any of the players in that market will understand. We have to come up with rules that are transparent that any of the players in that business understands
“You cannot reasonably expect serious foreign investors, portfolio investors Foreign Direct Investment, that is why we were talking about short term we are not going to expect that players
“Those players who will have direct impact on your market will not do so if we do not have an open, transparent system that everybody understands, that can be relied on.
“Those two immediate steps will go a long way to ease up the restrictions and encourage investors to come with their money. The short term measures is something that my team will address. The impact will help us with greater liquidity.
“In setting up those guidelines, one will also have to carry stakeholders along
We should be ready to engage people.
“These are two immediate steps that will go a long way to ease up the restrictions and encourage investors to come with their money. The short term measures is something that my team will address. The impact will help us with greater liquidity. ”
“On the issue of inflation , again there are longer term measures there are shorter term measures and I believe that some of those measures are being taken already.
“We will be looking at evidenced based monetary policies. We must do something about our data capacity to take critical decisions, based on data.
“On the issue of inflation and the price of goods , the jury is out, some people will say structure some people will say it is money supply. It is a combination of both. If indeed it is food inflation we need to ramp up food production.
That is the effort that the fiscal side will tackle and it is tackling and we will collaborate with them to ensure that it happens, if it is energy we know the challenges of energy that if you were importing things into the country that has energy component, automatically you are importing inflation
“The whole objective of ensuring that the energy side of the country is ramped up we also will work very closely with the fiscal side to ensure that it happens.
“Finally, the big issue that comes up any times is the issue of money supply. That has major effect on inflation. Studies have shown that 50% of inflation has been as a result of deficit financing.
We will do everything to ensure that we work closely with the fiscal side to address deficit financing. Those are the assurances that we can give you. We will ensure collaborative efforts to address the excesses of the past. ”
“We can not afford to have the big challenges from fiscal deficit financing.”
Responding to lawmakers question on the breach of rules by the immediate past Governor of the apex Bank, Godwin Emefiele, Cardoso assured the lawmakers that the CBN under his leadership would insulate itself from manipulations by politicians.
“Under my leadership, we won’t be hijacked by anybody. We will do what is right, when it is right. We have seen the effect of not doing things right. With the resetting of the CBN, we will ensure the culture of compliance.
“We will have zero tolerance for abuse of compliance. One of the key mechanism for compliance is the hallowed Chambers. Now that we propose to have a reset, we are appealing to members of this Chamber to work with us. Whatever the CBN Act says, we need to comply with it. What is lacking is the implementation of compliance. ”
Cardoso assured Nigerians that the CBN under the Tinubu administration would attain $1Trillion Gross Domestic Product in 8 years.
He said:” What is important to us is the element of economic growth. Our feeling is that in identifying the important issues with economic growth, we believe very strongly that size matters.
“The economic policy proposal of the administration identified a set of fiscal reforms and growth patterns that will be achieved in $1trn GDP within 8 years.
In reviewing selected growth targets that can achieve $1trn GDP, interviewing selected countries with large population and similar characteristics as Nigeria, it is interesting to identify micro-economics indices that points to Nigeria’s economic trajectory living faithful to implementation of the proposed economic reforms.
In economies bigger than $1trn these indices include moderate inflation, sizeable foreign reserves and capacity to creating rebound from economic downturn.
In order words to the extent that the administration has defined such a bold target for the country, it is our feeling that achieving this is very critical to achieve the stability that we require in various economic indices, it is not the only thing but it is very important. So we believe that this is the right way to go
Given this, a refocused CBN will better serve the country through monetary policy interventions and advisory roles that sustain the implementation of the administration fiscal policy.”
One of the nominees, Mr Muhammad Sani Abdullahi Dattijo, also listed efforts in the pipeline to inspire confidence of Nigerians in the apex bank.
” We must restore the bank to its core mandate as Central Bank. It is important to depoliticise the CBN. The third is communication and feedback, especially with the Hallowed chamber. If confirmed, you will see significant amount of communication, transparency and feedback
We will also take important, evidenced based data. We will also take cognisance of monetary and fiscal side.
We will restore the dignity of the CBN.
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