Dr. Olayemi Cardoso took over the reins of the Central Bank of Nigeria (CBN) when Nigeria’s headline inflation was at 25.80 percent with the associated food inflation at 29.34 percent. It is also a time when the exchange rate of the naira to the United States dollar and the Monetary Policy Rate (MPR) are at N980/$ and 18.75 percent, respectively, resulting in a subdued economic growth of 3.2 percent as of June 2023.
Public debt continues to gallop, rising from N35.46 trillion as of June 2022 to N87.37 trillion by June this year. Another national metric, capital importation, declined from a quarterly average of $1.67 billion in 2021 to $1.33 billion in 2022 and further to $1.13 billion in 2023.
Against the backdrop, stakeholders in the country including captains of industry, policy makers, and civil society organisations have listed their expectations for the new helmsman at the CBN and his team, saying confidence in the Nigerian economy must be restored immediately, stressing that the new CBN team has no time for extraneous activities but to hit the ground running.
Vahyala Kwaga, Senior Researcher and Policy Analyst at the BudgIT Foundation, said one of the crucial tasks before the new CBN governor is to remove the perception of secrecy that is associated with anything the CBN does.
“The CBN will have to move up from being a government institution shrouded in secrecy, to one that is far more open and transparent. Under the former acting CBN Governor, the bank released its annual report for the last 8 years. To put it mildly, this is unacceptable as it depicts to the international community (from whom the country seeks investment) that the bank is run without any appreciation of standard best practices. The image of the CBN as a professionally run institution must be taken seriously,” Kwaga said.
He said the sale of foreign exchange to banks must be done transparently, adding that the approach given to inflation in the last one and half years has shown that raising interest rate has proved not to be an effective means of moderating inflationary pressures in the country, noting that the CBN, being a government bank, should avoid a situation where instead of the commercial banks in the country, it is the CBN that will be lending money to individuals, as witnessed under the previous administration.
“In terms of information sharing, the bank (CBN) should work more in tandem with the fiscal authorities. The previous Minister of Finance had, on a few occasions, complained that she was completely unaware of several consequential actions of the CBN. This is bad for the necessary cohesion that the government should have. The bank must be able to demonstrate leadership, especially regarding borrowings (and repayment) by the federal government,” Kwaga said.
The chief executive officer of a prominent microfinance bank in the country, who pleaded anonymity, wants the new management at the CBN to re-commit to the mission of establishing microfinance institutions in the country.
“The mission was simply to expand the frontiers of finance to include persons and small businesses and to address mass poverty with easing access to credit in order to boost income earning capability of ordinary Nigerians.
“Till the recent past, the apex bank had intensely been committed to this mission. I believe actors in the sector expect the new leadership of the CBN to re-commit to this mission. Immediate steps could include re-visiting the Microfinance Development Fund provision of the Nigerian Microfinance Policy. This provision makes for refinancing arrangement, which will lend funds to microfinance banks for the purpose of on-lending to low-income Nigerians and their micro-businesses at affordable interest rates,” the person said, adding that there should be consultations with key stakeholders in this sector in order to determine the best approach to optimise the potential of the sector.
Another CEO of one of the leading investment firms in the country, who did not want to be mentioned also, said the CBN under Dr. Cardoso should review the sources of Nigeria’s foreign exchange inflows for the purpose of optimisation.
“I expect the new CBN Governor to review our sources of FX inflows and work with all the stakeholders to optimise their operations with no excuses accepted. So, encourage the NNPC for example, to put all that are required in place to ensure it produces at least 2.2m barrels of crude, etc. Put in place a proper think- tank of stakeholders who are ready for a change,” the person said.
Dele Oye, President, Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) wanted the new CBN to address the monetary and regulatory framework challenges of the country as well as ensuring exchange rate stability while the agriculture and manufacturing sectors will get the desired level of support.
He said: “Policy: The new CBN Governor should continue to implement sound monetary policies that support economic growth and development. He should work towards maintaining price stability, controlling inflation, and ensuring adequate access to credit for businesses and entrepreneurs. We also expect him to formulate policies that promote financial inclusion, especially for the unbanked population in our country.
“He should focus on maintaining exchange rate stability and ensuring that foreign exchange is available for essential imports. This will help to boost trading activities and promote international trade relations.
“We expect the new CBN Governor to sustain the various interventions and policies put in place by the CBN to promote agriculture and manufacturing sectors of the economy. We believe that these sectors have the potential to drive economic growth, reduce unemployment, and enhance food security in our country. He should review the regulatory framework within the banking sector. He should ensure that the banking system is robust and transparent, with adequate regulatory oversight. Furthermore, the regulatory framework should support innovation and creativity in the financial sector.”
The Analysts Data Services and Resources (ADSR), a think-tank that focuses on economic research, advisory, data processing and survey, while making suggestions on Nigeria’s economic challenges, said to speed up economic growth and job creation, the country must “ensure effective coordination of macroeconomic policies, promote access to funds for entrepreneurs, especially MSMEs, and establish a sustainable framework to enhance the operation and survival of the private sector.
“To boost access to capital, Nigeria must increase insurance penetration levels and pension coverage to provide a greater pool of long-term funds to finance capital formation as well as make Nigeria a regional financial hub in Africa,” ADSR said.
The above is in addition to Nigeria not being able to achieve any of the Sustainable Development Goals (SDGs) as of half year 2023, with Tunisia the best performing African country, ranked 58th in the world, having attained one SDG.
“Of the 166 states that The Sustainable Development Report 2023 is able to assess, Tunisia is the top-ranked African nation in 58th position. It is only regarded as having achieved one SDG, that of ending poverty, but still has major challenges in ending hunger, providing decent work and economic growth,” African Business stated.
