By Nik Ogbulie
Coming on the background of interest rates policy shifts across the globe, Yemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has taken the opposite direction , indicating that the issues of rates are controlled by geopolitical and geoeconomic differences.
In his explanations after the 297th Monetary Policy Committee (MPC) , the Governor insisted that decisions of government which drive certain actions and inactions are reasons which the rates regime will always move in the negative direction with what happens in several other economies.
He also noted that government’s fiscal policy actions are responsible for the discrepancies at the forex market, noting that the release of money to the State governments by the Federal Allocation Committee (FAC) defines the simply law of demand and supply. He said that there is a correlationship between the fall in Naira value at the Foreign Exchange Market and the release of huge amount of dollar by FAC. He indirectly indicted the government on this and sues for a creative fiscal policy approach by the government so that the impact will not make nonsense of existing efforts and indication.
Cardoso’s reference to the FAC anomaly has been praised as it was a very bold spot to take the bull by the horn so that numerous distortions would not creep into the system . The reaction is believed to have drawn positive responses from experts wjo dubbed the outburst as fearless from the point of view that distortions would be minimised.
The Governor claimed that growing spate of confidence in the economy has started to be identified as critical indices have reported very significant growth that could be seen as clear pictures of the effects of structured applications of policies, innovative developments and new attitude to work as has beign invoked by President Bola Tinubu.
According to Cardoso, developments in the fiscal policy realms have been identified as efficiently driving the possibility of reducing the country’s import duty bill between 10% and 15% annually, leading to a substantial crash . This is believed to have to potentially reduce forex demands and induce some substantial return to Small and MSME programme as initially agreed under the country’s development master plan.
Apart from a storborn core inflation that gained a little traction, the apex bank believes that the one year old management is on track, despite the obvious shenanigans that are still rearing their ugly heads.
It is also believed that by the next meeting in November, the monetary policy end would be speaking the language all the operators in the economy can understand.
In what sounded like a positive optimism , the Governor seems highly encouraged as indications have grown sporadically to believe the Governor may have been moving on the right direction and has drawn the battle line to assuage Nigerians of the possibilities of failed policies and elegantly realise his avowed one trillion dollar economy in the next few years.
