*Godwin Emefiele, Governor of the Central Bank of Nigeria, has stated the philosophy behind Central Banks鈥� interventions in the real economy is to indirectly influence cost of production for firms and affect prices positively by improving the flow of credit

Gbenga Kayode | 绿帽献妻

The Central Bank of Nigeria has created several initiatives geared towards building a strong, stable and resilient economy that is self-sustaining and able to weather unanticipated shocks.

绿帽献妻 reports Mr. Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), who disclosed this development in a statement reiterated that the focus of the Bankers鈥� Bank is to stabilise the macroeconomic sector of the country鈥檚 economy.

The Corporate Communications Department of the Bank in the statement noted Emefiele said this Monday, March 28, 2022, while delivering a paper at the 40th Anniversary/Convocation Lecture of Ekiti State University, Ado-Ekiti, Ekiti State capital.

The topic of the CBN Governor鈥檚 presentation 鈥淭he Role of Central Banks in Managing Economic Downturns鈥�.

Represented on the occasion by Mr. Edward Adamu, Deputy Governor of CBN in charge of Corporate Services, stated that the CBN had created various initiatives aimed at building a strong, stable and resilient economy that would be self-sustaining and able to weather unanticipated shocks in Nigeria.

The Act establishing the CBN, he said, envisages the role of development finance, which the Nigerian context currently demands.

Emefiele also noted that 鈥渢he intervention of central banks in development financing is not new as it dates back to the 1920s.鈥�

According to him, some Central Banks in more advanced economies got directly involved in the financing of government programmes/projects in their early days.

Emefiele further stated that Central Banks in both advanced and emerging markets embraced quantitative easing.

This measure, he stated, is to support their economies toward recovering from the global financial crisis of 2008/2009, and the associated economic downturn triggered by the COVID-19 pandemic.

鈥淢any Central Banks in advanced, emerging and developing economies during the recent COVID-19 pandemic supported their fiscal authorities.

鈥淭he aim is to aid recovery of their economies following the significant decline in global growth occasioned by the pandemic.

鈥淭hese central banks, particularly in developing countries, intervene in the real economy to enhance the transmission mechanism of monetary policy actions,鈥� said he.

Emefiele also said that the Bank facilitates the development of financial markets through the creation of easy access to credit for investment and production.

鈥淚t is thus undeniable that development finance interventions are frequently an integral part of the recovery strategy in most countries,鈥� he said.

According to him, the philosophy behind Central Banks鈥� interventions in the real economy was to indirectly influence cost of production for firms and affect prices positively by improving the flow of credit.

The CBN governor as well expressed worry that the country鈥檚 manufacturing sector contributed less than 15 percent of the Gross Domestic Product (GDP).

He frowned on the continuous importation of several commodities which Nigeria had the capacity to produce and export.

Emefiele stated: 鈥淭o address this challenge, we have accepted the charge of President, Muhammadu Buhari for the country to produce what it eats and eat what it produces.

鈥淭he CBN, working with Deposit Money Banks and participating financial institutions, is focused on critical areas such as the agricultural and manufacturing sectors.鈥�

The CBN Chief noted: 鈥淲e have granted more than three trillion Naira in intervention loans that have aided economic recovery and employment generation.

鈥淕iven the limited fiscal space due to the significant drop in government revenue, the CBN has had to intervene with development finance tools and some monetary policy innovations to aid recovery without jeopardising price stability.鈥�

He said that different categories of Nigerians, particularly women and youth, had benefitted from various CBN intervention programmes thus far.

The programmes to include the Anchor Borrowers Programme (ABP), Targeted Credit Facility, and Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS), he stated.

He also expressed the commitment of the apex bank to continue leading a 鈥減eople-focused鈥� Central Bank that would promote macro-economic objectives, such as low inflation and stable exchange rates.

He stated the CBN would also focus on promoting inclusive growth and reducing unemployment in the country.

Emefiele added: 鈥淲ith an annual population growth rate of close to 2.8 percent, it is important that all efforts are made to ensure that employment opportunities are available for Nigerians, 鈥減articularly in sectors that have the potential to absorb the youth.鈥�

Kindly Share This Story