Sanusi commended the CBN under the present Governor, Olayemi Cardoso for the remedial policies of the Bank. He said, “I have nothing but positive words for what the Central Bank has done.
The federal government and the Central Bank of Nigeria (CBN) have made concerted efforts and rescued the economy from the brink of total collapse and stabilized it though there are still mileages to cover to engender prosperity going forward.
In the pursuit of economic recovery, there is no magic wand nor quick fixes to all the economic challenges as everything has to go through the processes in the economic cycle and achieving macroeconomic stability is the starting point.
To fully appreciate the efforts of the federal government and CBN in the process of economic recovery, it is important to understand that major and chronic challenges of the economy and its trajectory over the past years through successive governments but especially the immediate past administration which printed money and abused the Ways and Means facility, as a result, excess money was pumped into the economy and which triggered inflationary pressure.
Former CBN Governor, Sanusi Lamido Sanusi (now the Emir of Kano) had noted that “everything we are complaining about today is something that every economist would have told you would happen. Once you print money you know where you will end up”.
Sanusi commended the CBN under the present Governor, Olayemi Cardoso for the remedial policies of the Bank. He said, “I have nothing but positive words for what the Central Bank has done. We are coming from a background of very high level of instability as a result of loose money and uncontrolled money supply and the Central Bank has taken the last one year to mop up all that money”.
He further noted that though interest rate was still high, but the exchange rate had been stabilized and the economy had been rescued and pulled back from the brink of total collapse.
Sanusi also noted that though inflation was still high relatively, but it had come down from the very high levels of a few years ago and that the economy had recorded growth which he noted was the first time in a long time that the economy grew faster than the population growth.
The Minister of Finance and Coordinating Minister of the Economy, Professor Taiwo Oyedele also credited CBN with helping to stabilize and restore confidence in the economy and he noted that the economy recorded a balance of payment surplus of USD5 billion in 2025 and foreign reserves rose to USD55 billion.
CBN has maintained sustained vigilance and a proactive money policy stance and initiated policy reforms for macroeconomic stability and enabling environment for economic growth and development.
In the recent past, CBN cleared an outstanding USD7 billion forex backlog and which restored confidence among market participants and reinforced Nigeria’s commitment to honoring financial obligations in a timely and efficient manner.
An expert and CEO, Centre For The Promotion of Private Enterprise, Dr. Muda Yusuf also noted that the development reduced pressure on CBN and gave the Bank the latitude to build up reserves and be able to support the naira.
CBN has built institutional credibility by re-establishing confidence in the system, improving regulatory effectiveness, promoting transparent decision-making, responsible governance and creating an enabling environment for capital inflows and economic growth.
The Bank’s efforts in the restoration of confidence in the system and the stabilization of the economy are foundational for building more blocks towards strengthening the economy.
Recently, the federal Ministry of Finance and CBN signed a fiscal-monetary pact to strengthen the tie in policy formulation and align economic policies. The agreement is for coordination, data sharing, policy consultations towards lowering inflation sustainably and strengthening the foundations for investments.
As noted by the Multilateral Investment Guarantee Agency (MIGA), confidence and stable investment environments are essential for attracting sustainable private investment in emerging economies.
Going forward, though the economy has been stabilized and confidence restored, inflationary pressure reduced (though its still relatively high), with a trade surplus, increased foreign reserves and economic growth, there is still an anomalous pattern in the economy that needs to be corrected.
Ideally, economic growth should be employment elastic. Growth should have a positive correlation with employment which provides personal income which will boost aggregate demand and which in turn will lead to business expansions and inclusive and sustainable growth but the anomaly is that the economic growth is not employment elastic and which has been the pattern of growth in Nigeria’s economy since the past years till date.
One major reason for the anomalous growth pattern is because the growth is driven mainly by capital-intensive sectors such as oil, telecommunications and finance, which relatively are not labor-intensive compared to the real sector.
The real sector which consists mainly of manufacturing and agriculture, is the driving force of any economy and which creates linkages in the economy more than any other sector.
Experts have noted that the real sector has the capacity to generate high employment and that it satisfies aggregate demand and is connected to the standard of living of the people and is used to measure the effectiveness of macroeconomic policies.
The fiscal and monetary authorities need to evolve creative policies that will incentivize and support the real sector for the economy to achieve inclusive and sustainable growth.
Nwobu, a Chartered Stockbroker and Business Journalist wrote via arizenwobu@yahoo.com Tel: 08033021230
