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Welcome, New CBN Governor

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Less than 48 hours after assuming office at the nation’s apex bank, the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, who takes over from where Malam Sanusi Lamido Sanusi and Dr Sarah Alade left off, rolled out the principles that would guide his tenure as the nation’s ‘central banker’. As is normal in such situations, he was overtly enthusiastic and has already made some pronouncements that will eventually be focal points in subsequent assessment of his programmes and policies. The three that have captured the attention of the Nigerian public are the pledge to pursue a gradual reduction in key interest rates, the inclusion of unemployment rate in monetary policy decisions and the abolishing of fees associated with limits on deposits. Emefiele also proposed a business approach to the funding of small and medium scale enterprises (SMEs), which he said would require the private sector coming in to drive the process and invariably achieve its profit motive, while not losing sight of the development objectives of government.

Before now, SMEs had been left to struggle while agencies of government propounded theories that did not go far enough to address the real issues of using the sub-sector as a pedestal for achieving the set objective of empowering young entrepreneurs experiencing start-up problems. As is usual with government and its policies, an industry soon grew around the SME project, with the resultant effect of quantum amounts of money pumped into it with not much to show for it, simply because the money went into the wrong hands.

It is also our hope that the reduction in the interest rates would spur the real sector on to embarking on activities that would eventually galvanise the productive sector of the economy and launch it along the path of growth and expansion, with the attendant benefit of job creation. We wish, too, that the rates would come down to a single digit, to serve the desired purpose. This is important, because no business would want to take facilities at the present levels, except where absolutely necessary. It is in this regard that we commend Emefiele’s promise to introduce a broad spectrum of financial instruments to boost specific enterprise areas in agriculture, manufacturing, health and oil and gas.

Above all else, in our view, it is the person of the governor that will determine the success or failure of his policies at the CBN. He must endeavour to avoid what would stir up controversy around him. Everywhere in the world, central banks governors are noted for implicit conservatism in their utterances and functions. In most cases, they prefer to let their actions, plans and policies speak for them. Emefiele must shun playing to the gallery in order to score identifiable points.

Article Credit: Leadership

Updated 4 Years ago

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