There must be appropriate structural reforms in the key sectors such as agriculture, power and petroleum in order to stimulate productivity and grow the nation’s economy.
Governor of the Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi, stated this recently in Abuja while speaking to journalists shortly after the Monetary Policy Committee (MPC) meeting.
According to him, while the CBN’s efforts in stimulating economy development are moving in the desired direction, those efforts must be complemented by structural reforms in agriculture, power and petroleum sectors so as to achieve the desired objectives.
Earlier in its communiqué, the MPC had noted monetary policy should contribute to the consolidation of a positive and stable longer-term macroeconomic environment conducive for growth and development.
However, the committee stressed that at this point in time, the trajectory of prices and output is dependent on fiscal and structural policies than on the monetary stance.
“The sluggish growth in credit, stable exchange rate, healthy reserve position and benign month-on-month inflation do not suggest a need for further tightening at this point. Also, the underlying reasons for slowdown for agriculture and oil GDP growth will not be addressed by monetary easing,” the committee said.
It advised the CBN to put in place appropriate measures that would enhance the flow of credit to the private sector, in particular to those activities that have the potential of inducing growth in a relatively short period of time.
The committee commended the efforts of the apex bank in monitoring the foreign exchange demand and capital inflows into the economy, with a view to ring-fencing the economy from external shocks and other vulnerabilities; and in building the stock of reserves to meet genuine demand for foreign exchange.
Besides, the committee expressed satisfaction over the orderliness in the foreign exchange market and the stability of the exchange rate. It also encouraged the bank to continue its close surveillance of activities in the foreign exchange market, given the current developments in the international currency and financial markets.
Meanwhile, the MPC has welcomed efforts being made to improve fiscal consolidation, saying these efforts should be sustained, especially in view of the growing domestic public debt stock.
The committee also noted the healthy collaboration that has been established between the fiscal and monetary authorities, and urged the CBN to continue supporting the fiscal authorities in their pursuit of very difficult reforms.