CBN Governor, Cardoso Reveals Tinubu Govt’s Eight Years GDP Target.
The Governor of the Central Bank of Nigeria, Yemi Cardoso, disclosed on Thursday that the economic policy proposals put forth by President Bola Tinubu‘s administration have the potential to achieve a Gross Domestic Product (GDP) of one trillion dollars within a span of eight years.
Streetdope reports that the CBN governor revealed this during the ongoing 2023 World Bank/IMF Annual Meetings in Marrakesh, Western Morocco.
According to Cardoso, the apex bank is currently undergoing a process of reorientation to prioritize overall economic growth. He furthermore said the incumbent administration will identify fiscal reforms and growth targets that will enable the realization of this ambitious goal within the specified timeframe.
Cardoso highlighted that a study conducted on emerging markets has indicated that Nigeria’s economic trajectory aligns with the proposed economic reforms, provided they are faithfully implemented.
This study involved an examination of economies such as Brazil, Russia, India, China, and South Africa (BRICS), as well as Mexico, Indonesia, Nigeria, and Turkey (MINT).
These countries share similar population sizes and developmental characteristics with Nigeria, Streetdope understands.
In economies bigger than 1.0 trillion dollars, these indicators include moderate inflation, sizable foreign reserves, and the capacity to quickly rebound from a cyclical economic downturn.
“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,’’ Cardoso said.
He also said that the lines between monetary policy and fiscal intervention should be clearly delineated, and the CBN needed to be pulled back from its development financing initiatives to more advisory roles.
“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,’’ Cardoso said.
CBN Challenges Are Large And Complex.
The CBN governor listed other roles of the CBN, including accelerating access to consumer credit and expanding financial inclusion for the masses.
He stated that the bank should mitigate risk in financial instruments in order to stimulate private sector investment in the housing, textiles and clothing, food supply chain, healthcare, and educational supplies sectors.
Additionally, Cardoso emphasized the importance of utilizing its influential position to bring together key international stakeholders for collaboration in government and private sector initiatives.
He acknowledged that the Central Bank of Nigeria does not possess a magic wand to deal with the country’s current economic difficulties, as the issues confronting the bank are extensive and intricate.
These challenges, he said, include deficiencies in corporate governance, unconventional monetary policies and foreign currency management, unconventional utilization of Ways and Means spending, and a backlog of foreign exchange demand.
“The bank has to establish how much of the FX backlog is real and how much is given to speculation or hoarding.
“It has to identify creative financing options for clearing the short- to medium-term backlog.
These problems need in-depth review by the new CBN leadership team to determine what mechanisms are currently working, what can be tweaked or dispensed with, and what new tools need to be introduced. It has to examine how issues of governance could be addressed,’’ he said.
Cardoso stressed that with focused leadership and sustained reforms, however, “it is expected that over time, Nigeria will see gains and the opening of economic spaces.
“The country will also attract new investments, create employment, and give its hardworking and talented people the opportunity for a more prosperous future.’’
The CBN governor also expressed President Tinubu’s commitment to urgently clean up the CBN and its monetary policies.
“As a first step, Mr. President’s appointment of a special investigator into the affairs of the CBN went underway recently
Further to the clean-up exercise, the president brought in a new leadership to the helm of affairs at the CBN,’’ Cardodo said.