Godwin Emefiele, CBN Governor |
Whatever argument they’re putting
out there should not be taken seriously than that they are working to undermine
this government.
If they say it’s because of
increasing inflation rate, they should be informed, that some countries have
their inflation rates higher than their key interest rates (central bank
rates), especially when the central bank’s MPR is focused on improving the
economy.
Even our so-called inflation rates
that are produced by National Bureau of
Statistics (NBS) are so lacking in credibility that in most cases,
they are doctored figures done to favour the banking and financial sector since
it is on this basis that pro – banks high MPR-like 12% of Tuesday’s MPC meeting
– is produced.
Turkey’s interest rate at 7.5%
against inflation rate at 8.78% has the interest rate lower than the inflation
rate. The same is Japan where in an effort to grow the economy by growing
consumption has its interest rate at – 0.1% against its inflation rate at 0.0%.
The only way government can free
the economy from this perennial sabotage is by making sure that CBN’s monetary
policy stance is in line with government’s overall economic growth and
diversification agenda. But the most plausible way to bypass this
anti-SMEs, anti-real investment monetary policy of the CBN is by the federal
government creating a specialised development bank to function as the provider
of cheap loans (single digit loans) to Nigeria’s critical and strategic sectors
such as industrial, manufacturing and agricultural/food processing sectors.
The current harmonisation of the
CRR regime should be reversed with CRR on public sector deposits separated from
CRR on private sector deposits. With this, there’ll be a genuine pressure on
CBN to drastically reduce CRR on private sector deposits to close to zero so as
to encourage more private deposits, while pushing CRR on public sector deposits
to close to 100% to discourage public funds supposedly quarantined to find
their way to commercial bank lending books.
The ongoing argument that the
implementation of the TSA has taken care of that and as a result, makes the
separation unnecessary is not true because most states, and the legislative and
the judicial arms of government, are yet to fully comply with the TSA policy. (Guardian)
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