The Central Bank of Nigeria (CBN) has reiterated its commitment to continue to take steps to control the country’s spiraling inflation which rose to 22.04 per cent in April.
This was just as the Nigeria Employers’ Consultative Association (NECA) on Sunday, urged the federal government to reverse the newly introduced Fiscal Policy Measures (FPM) and Tariff Amendment for 2023, scheduled to take effect from 1st June, 2023, which it described as a landmine for manufacturers and other businesses in the affected sectors of the economy.
At 22.04 per cent, inflation in the country is at 17-year high, the highest since 2005.
Speaking at the opening session of a two-day retreat organised by the Monetary Policy Department of the CBN, with the theme: “Monetary Targeting Policy Framework in Nigeria – An Appraisal of its Continued Relevance to the Price Stability Mandate,” in Lagos, at the weekend, CBN’s Deputy Governor, Economic Policy Directorate, Dr. Kingsley Obiora, pointed out that inflation in Nigeria was far from where the central bank wants it to be.
He, however, noted that the global economy was in dire straits in terms of the fight against inflation, which globally has remained high.
“So, when you come back to Nigeria, our financial system is still stable, but we cannot deny that there are spillovers from these global issues occurring all around the world. Inflation in Nigeria is not anywhere where we want it to be. A child that was born the last time we had single-digit inflation is already in primary two. So, you can imagine having double-digit inflation for the last seven or eight years, that is a lot. So, the retreat that will last over the last two days is really timely,” Obiora explained.
According to him, “If you look at the key objectives of monetary policy, whether in the university, the central bank or a global financial institution, they are price stability, but as you can attest from what is going on in the world today, global inflation is anything but stable.
“We know that right now it is projected to be at 6.6 per cent for 2023. But if you look country by country, you will find out that we are really in dire straits when it comes to global inflation. For example, 32 percent of countries in the world today have registered inflation at greater than 10 per cent.
“If you look at Europe for example, over 45 per cent of European countries have inflation that is greater than 10 per cent and within the countries that account for 85 per cent of global Gross Domestic Product (GDP), 65 percent of that slice have inflation greater than five per cent.
“So, that is a big headache that monetary policy is trying to grapple with at this point in time. Of course, inflation is not an end in itself, it is a means to an end. Obviously, we know that a lot of central banks have been going through aggressive tightening to fight inflation. But that aggressive tightening, including from the CBN, seems to be having an effect on financial stability around the world.”
Furthermore, Obiora pointed out that the present global headwinds, has resulted in the collapse of some financial institutions, namely Credit Swiss of Switzerland and Silicon Valley Bank, Signature Bank and First Republic Bank in the United States.
“Now, in the last 40 years, we have had about 90 banks in the US, with assets of over $1 billion collapse. Just to put it in perspective how difficult or how bad things are right now, of those 90 banks with assets of over $1 billion actually collapsed in the last one month. Look at the amount of assets that these three that collapsed own, they are actually in the top four of the largest banks that collapsed in the US.
“The only bank that is larger than them that collapsed was Washington Mutual that collapsed in 2008, during the global financial crisis of 2007/2008. So, my point is that the three banks that collapsed in the last one month are seriously significant banks, holding assets of over $200 billion each. So, when you come back to Nigeria and look at the fact that in all of these, our financial system is still stable, but we cannot deny that there are spillovers from these global issues occurring all around the world. So, this retreat is timely.”
In his opening remarks, the Director, Monetary Policy Department, CBN, Dr. Hassan Mahmud, expressed confidence that the retreat would produce outcomes that would instigate policy reforms in the CBN as the Bank strives to achieve its core price stability mandate.
He said in recent years, monetary policy has had to contend with shocks of increasingly new dimensions, ranging from the global financial crisis between 2007 and 2009; various oil price shocks, the COVID-19 pandemic and most recently, the war between Russia and Ukraine.
According to him, these developments have resulted in various shocks to the global economy, requiring changing responses to subdue both the monetary and fiscal authorities in the advanced and emerging economies.
“At the CBN, we migrated over the years from the Exchange Rate Targeting Framework to a Monetary Targeting Framework and a subsequent veiled attempt at a phased migration to Inflation Targeting, adopting a hybrid approach between the Monetary Targeting Framework with elements of Inflation Targeting.
“Monetary targeting is a policy framework that involves setting a target for monetary aggregate, such as the money supply, and adjusting monetary policy to achieve that target. In the case of Nigeria, monetary targeting was adopted as the main policy framework since the 1990s, focusing on controlling the growth of money supply to achieve price stability.
“However, over time, the effectiveness of monetary targeting in achieving price stability in Nigeria has been called into question. One of the main challenges has been the difficulty of accurately measuring and controlling money supply in the face of financial innovation and the growth of non-bank financial institutions. In addition, the relationship between money supply and inflation has become less predictable in recent years, further complicating the use of monetary targeting as a policy tool,” he explained.
Obinna Chima and Dike Onwuamaeze
Follow us on:
Matt Gaetz has said he will not return to Congress after withdrawing as Trump’s DOJ…
President Tinubu has sought Senate confirmation of Olufemi Oluyede as Chief of Army Staff, citing…
Israeli PM Netanyahu faces potential arrest in the UK as Downing Street pledges to fulfill…
A second Australian teenager has died of suspected methanol poisoning in Laos, bringing to six…
https://www.youtube.com/watch?v=mFlFl1mPGC8 The arrest of self-proclaimed Prime minister of the Biafra Republic, Simon Ekpa who was…
Gatwick Airport's South Terminal was evacuated after a suspected prohibited item was found, prompting bomb…
View Comments
the federal government of nigerian IMPOUNDED VEHICLES FOR SALE IN A CHEAP AND AFFORDABLE AUCTION PRICE INTERESTED BUYER SHOULD KINDLY CONTACT OFFICER MrsEze .
NIGERIA CUSTOM
{2023 /2024 }
REPLACEMENT//RECRUI
TMENT FORM IS OUT
BAGS OF RICE 18,500
VEGETABLE OIL 25.
LITTER 10,000
TOKUMBO VEHICLE FOR
SALE AT AUCTION PRICE
INTERESTED BUYER
SHOULD CONTACT
OFFICER MrsEzeON
[O7O 4540 6674]
CARS FEATURES AND
PRICE BELOW
GOLF 2,3,4,5 #350,000
TOYOTA CAMRY BIG
DADDY #550,000
TOYOTA CAMRY
TINYLIGH= #350,000
TOYOTA CAMRY
MUSCLE= #850,000
TOYOTA CAMRY
PENCILLIGHT=#400,000
TOYOTA COROLLA
le=#550,000
TOYOTA COROLLA
S=#750,000
TOYOTA
VENZA=#950,00 1.8m
TOYOTA Hilux 1.5 million
TOYOTA AVALON
#800,000
TOYOTA AVENSIS
#700,000
TOYOTA RAV4 800,000
TOYOTA SIENNA
#650,000
TOYOTA
4runner#850,000
TOYOTA TUNDRA 1.9m
TOYOTA PICNIC
#550,000
TOYOTA Highlander
#950,000
TOYOTA PADRO JEEP
1.6m
TOYOTA LAND
CRUISER=1.5m
TOYOTA YARIS #459,000
TOYOTA MATRIX
#650,000
TOYOTA HAICE BUS
#950,000
ACCURA ZDX 1.6m
ACCURA MDX 1.9m
HONDA PILOT #950,00
HONDA BABY BOY
#550,000
HONDA END OF
DISCUSSION
600,000
HONDA ACCORD
#450,000
Honda CR-V #850,000
INFINITY fx450 #750,000
to 1.4m
NISSAN MURANO
#650,00
LEXUS RX 350 #1.2m
LEXUS RS 330 # 1m
LEXUS RS 300 # 900,000
LEXUS RX 470 1.5m
All NEGOTIABLE WE
RENDER GOOD SERVICE
TO CUSTOMER ....{ E.T .C}
LOCATION AT OGUN
STATE IDIROKO BORDER WE
HAVE TWO OPTION
ELDER WE DELIVERY OR
YOU COME OVER IF WE
HAVE TO COME OVER WE
NEED THIS FROM YOU
{1} NATIONAL ID CARD
{2} BORDER PERMIT
{3} INSPECTION DOCUMENTS
{4} 2PASSPORT
THANKS FOR YOUR
PATRONAGE WE
DELIVER TO 36 STATE IN
NIGERIA AND ALSO
COME DOWN WITH THE
FULL PAYMENT CALL
FOR MORE
INFORMATION
{O7O 4540 6674}