Emefiele says Nigeria needs Extensive Structural Reform to Accelerate Economic Growth

05 Jan Emefiele says Nigeria needs Extensive Structural Reform to Accelerate Economic Growth

Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, has said that Nigeria needs extensive structural reforms this year to fast-track the country’s economic growth.

He stated this in his personal comment at the last Monetary Policy Committee (MPC) meeting, a copy of which was posted yesterday on CBN’s website.

The CBN governor noted that as business sentiments brightened, following the various supply-side supports by the apex bank and orderly implementation of macroeconomic policies, he expected domestic fragility to diminish with benign knock-on effects on welfare and livelihood.

He said, “Our medium-term goal is to fast-track growth above historic average. Economic activities may reach pre-pandemic levels if the resilience of non-oil activities (especially agriculture and manufacturing sectors) are given continued impetus.”

Nigeria recorded eight consecutive months of deceleration in headline inflation rate to 15.4 per cent in November 2021.

According to Emefiele, this reflected the disinflation in both the food and core components.

He stated, “Regardless, inflation remained at unacceptable levels, propped by structural inadequacies. Short-term projections indicate further moderations in expected inflation, especially as development financing continue to resolve supply rigidities.

“Analysis of monetary condition indicated a tepid outcome during the review period with mixed interest rate developments. While weighted average inter-bank call rate fell 3.21 percentage points to 10.00 per cent in October 2021, open-buy-back rate gained 1.07 percentage points to 12.18 per cent.

“Monetary aggregates expanded in October, although, below provisional targets. Broad money growth at 7.10 per cent, was 2.54 per cent points below benchmark.

“The observed growth was, however, attributable to the 9.12 per cent expansion of net domestic assets underpinned by credits to the private sector.”

Emefiele pointed out that the banking system remained stable and resilient with capital adequacy ratio (CAR) at 15.2 per cent; liquidity ratio, 41.2 per cent; and non-performing loans’ (NPLs) ratio at 5.3 per cent.

He, however, acknowledged that in the forex market, the exchange rate pressure had persisted, despite external reserves accretion, while capital market metrics recorded positive performances.