CBN’s N10tn Economic Boost

CBN’s N10tn Economic Boost

The Governor of the Central Bank of Nigeria, Dr. Olayemi Cardoso, revealed that previous administrations of the bank implemented policies that injected N10tn into the economy through various intervention programs. He made this announcement at the annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria.

Quasi-Fiscal Activities

Cardoso stated that the apex bank had deviated from its core mandates by engaging in quasi-fiscal programs. These activities involved pumping over 10 trillion naira into the economy through initiatives in sectors like agriculture, aviation, power, and youth development. However, these activities distracted the bank from achieving its objectives and took it into areas where it lacked expertise.

Addressing the Issues

Cardoso assured that the issues affecting the bank would be tackled under his administration. He promised to address institutional deficiencies, restore corporate governance, strengthen regulations, and implement prudent policies. This would lead to significant stability in the short-to-medium term as the bank recalibrates its policy toolkits and implements far-reaching measures.

The Mandate of the CBN

Cardoso reiterated the primary mandate of the CBN, which is to ensure price stability. The bank also has other objectives such as issuing legal tender currency, safeguarding external reserves, promoting a sound financial system, and providing economic and financial advice to the government.

CBN Governor Vows to Fight Inflation

Refocusing on Core Mandate

In line with the strategy to refocus on its core mandate, the CBN will discontinue direct quasi-fiscal interventionist activities. Instead, it will utilize orthodox monetary policy tools for implementing monetary policy. The CBN has recently approved the adoption of an explicit inflation-targeting framework to enhance the effectiveness of its monetary policy. The details and requirements for this framework are currently being finalized alongside the fiscal authorities. Additionally, the CBN will provide forward guidance, enhance transparency, and maintain effective communication with the public to anchor expectations and build trust among stakeholders.

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