The newly appointed CBN governor Yemi Cardoso has hinted that his approach would be clearly different from his predecessor, Godwin Emefiele.
As the head of Nigeria’s government bank, the apex bank governor said he will focus more on the monetary policy of the economy, unlike Emefiele who has been trenchantly criticised for directly meddling in the fiscal aspect of the nation economy.
Cardoso, however, stated that where necessary, the apex bank will advise the federal government on the fiscal areas for the overall interest to reposition the nation’s economy for accelerated growth.
The apex bank governor made this known in Morocco on the sideline of the world bank and IMF Annual meetings.
The comment has been described by financial experts as his first major policy statement, expected to shape the direction of his administration as Nigeria’s top banker and regulator in the next five years, following his appointment by President Bola Ahmed Tinubu, and his clearance by the Nigerian Senate for the top job earlier this months.
Cardoso said, “Much has been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.
“In refocusing the CBN on its core mandate, there is a need to pull it back from direct development finance interventions into more limited advisory roles that support economic growth.
“The bank should act as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy.
“It should facilitate new regulatory frameworks to unlock dormant capital in land and property holdings.”
Apart from his promise to focus on the monetary aspect of the economy, the governor, yesterday also veered away from one of Emefiele’s regulatory policies which placed foreign exchange restriction on some imported items.
Over 40 imported items were placed on forex restriction list under the former CBN governor for years. The ban has now been lifted, according to a statement released on Thursday by the apex bank which said importers of these items are now allowed to source forex from the Importer and exporter, I& E, forex window like other importers.
The CBN governor has also unveiled his plan to work with the government to set Nigeria on the same trajectory with other emerging economies such as Brazil, China, South Africa, India, Mexico, etc. by expanding the nation’s Gross Domestic Product, GDP, to $1 trillion dollars in few years.
The reform to refocus the apex bank for overall economic growth is ongoing, Cardoso said, adding that his focus will be on how to moderately reduce inflation, increase foreign reserves, and quickly turn around the country’s cyclical economic downturn.
According to the apex bank helmsman, “Given this, a refocused CBN will better serve Nigeria through monetary policy interventions and advisory roles that sustain implementation of the administration’s fiscal proposals.”
“Much has been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.
“In refocusing the CBN on its core mandate, there is a need to pull it back from direct development finance interventions into more limited advisory roles that support economic growth.
“The bank should act as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy.
“It should facilitate new regulatory frameworks to unlock dormant capital in land and property holdings.”
The apex bank on Thursday, finally lifted the foreign exchange restriction placed by Emefiele on the importation of 43 items.
The Apex Bank lifted the restriction in a statement issued by the Director, Corporate Communications Department, Isa AbdulMumin.
It explained in the statement that the 43 items are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.
The ban on the 43 items was announced in 2015 through a Circular referenced TED/FEM/FPC/GEN/01/010.
The CBN explained then that the measure was to sustain the stability of the naira and ensure the efficient utilisation of forex.
Importers of the 41 items were excluded from accessing forex at the exchange markets to encourage local production and modified the list subsequently to 43 items.
The items include clothing’s, cement processed foods and meat, poultry products, metals and woods, among others.
In the statement, the CBN said it will continue to promote orderliness and professional conduct by all participants in the Nigerian Foreign Exchange Market to ensure market forces determine exchange rates on a willing buyer – willing seller principle.
It said, “The CBN reiterates that the prevailing Foreign Exchange rates should be referenced from platforms such as the CBN website, FMDQ, and other recognized or appointed trading systems to promote price discovery, transparency, and credibility in the FX rates.
“As part of its responsibility to ensure price stability, the CBN will boost liquidity in the Nigerian Foreign Exchange Market by interventions from time to time. As market liquidity improves, these CBN interventions will gradually decrease.
Importers of all the 43 items previously restricted by the 2015 Circular referenced TED/FEM/FPC/GEN/01/010 and its addendums are now allowed to purchase foreign exchange in the Nigerian Foreign Exchange Market.
“The CBN is committed to accelerating efforts to clear the FX backlog with existing participants and will continue dialogue with stakeholders to address the issue.”
Meanwhile, stakeholders in the nation’s financial sector have described Cardoso’s move as a welcome development, they however pointed out that implementation could be a serious challenge even though the policies are good on paper.
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