Central Bank of Nigeria Governor, Godwin Emefiele has said that ensuring price stability and growing the nation’s economy through unconventional policy is paying off. Emefiele stated this at the first convocation lecture of Edo University, Iyamho, Auchi on Friday, 1st of November, 2019.
The Governor said in spite of the criticism from certain quarters the Bank would not be deterred by the activities of critics. According to him, the monetary policy which was being condemned by the opposition has so far delivered a good result.
“When we began to utilise these tools, they were initially criticised by adherents of conventional monetary policy tools. Critics asserted that our Foreign Exchange policies constituted of exchange restrictions, rationing of forex discretionary allocation based on priority categories and a multiple currency practice.
“While there is sufficient evidence of significant reductions in our annual import bill, and increased non-oil exports, these critics assert that we are restricting trade and creating unfair competition. To our critics, conventional Monetary Policy requires that to encourage domestic production, we should impose higher tariffs and levies.
“However, our experience in Nigeria has shown that these tools have never worked, given the various attempts by certain economic agents to undermine the success of these policies,” he explained. Emefiele said that regardless of the views of critics, the unconventional measures were well thought through and had been yielding significant gains for the nation’s economy.
He added that among the benefits noticed was the growth in Gross Domestic Products (GDP). He said after the five consecutive quarters of negative growth, beginning in the first quarter of 2016, there was a coordinated approach by the fiscal and monetary authorities to support a rebound in the nation’s economy during the second quarter of 2017. According to him, recovery has been driven largely by improved non-oil activities especially the agricultural sector.
He stated that agriculture was nonetheless reinforced by the pickup in the oil sector as oil prices rallied in 2017. Emefiele added that the recovery had been sustained for nine consecutive quarters and it was expected to get stronger in the short-to-medium-term.
The CBN Governor said as a result of the implementation of a tighter monetary policy regime, intervention programmes in the agricultural and industrial sectors, as well as improved Forex inflows, had reduced inflation. He noted that inflation began to decline from its peak of 18.7 per cent in January 2017 to 11.24 per cent as of September 2019.