Emefiele highlights Monetary Policy directions at 2022 Bankers’ Dinner

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Godwin Emefiele, Governor of Central Bank of Nigeria (CBN) said Over the coming years, monetary policy will remain focused on the objectives of price, monetary, and exchange rate stability. Our policy stance will, accordingly, remain tight to curtail inflation pressure, regulate capital flows, and buoy the naira-dollar exchange rate, he added.


2022 Bankers’ Dinner held in Lagos, Emefiele stressed that Monetary policy decisions will remain balanced, judicious, research driven, adequate and supportive of the real economy subject to underlying fundamentals. According to him, we will maintain the current tight Monetary Policy stance in the near-term, especially in view of rising inflation expectations and exchange market pressures. Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, he noted.


CBN Governor pointed out that based on the expectation of a robust non-oil performance, and barring any unforeseen shocks, GDP growth rate is projected to remain positive in the remaining quarter of 2022 and during 2023.

“The performance of the non-oil sector will be buoyed by the continued efforts at entrenching indigenous productivity in high-impact real sector activities, especially agriculture, MSMEs, and manufacturing. Domestic aggregate demand is further expected to be bolstered by the anticipated budgetary outlay and the surge of electioneering spending in the next few months. From 3.54 percent in quarter two of 2022, growth is projected to reach 3.7 percent in quarter three and 3.47 by the fourth quarter.


He noted that inflation expectations are rising as existing structural rigidities, are compounded by global factors and anticipated elections related liquidity upsurge. For the rest of 2022 and towards mid-2023 Nigeria’s rate of inflation is projected to remain elevated and above the 12.5 percent growth-aiding threshold. However, on the backdrop of our previous policy measures, and as the effect continue to permeate the system, our inhouse model-based simulations indicate that inflation rate could fall steadily to less than 15 percent by end-2023.


In his words: Though the CBN has so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets are expected to continue to exert considerable pressure on market rates. This pressure could be amplified by the forthcoming elections, especially as the political marketplace heats up. Notwithstanding these pressures, the CBN is determined to maintain its stable exchange policy stance over the next few months through innovative policy measures to manage the demand and supply of foreign exchange. If the current problem of oil theft is promptly corrected, we could expect a resumed inflow of crude oil receipts into the official reserves. This could foster gross stability in the foreign exchange market and enhance exchange rate stability.


Emefiele point out that overall, our balance of payments is expected to remain positive in the short-term. We have seen a recent boost in non-oil exports receipts to about US$2.5 billion. Hoping that the poor performance of the oil sector reverses, especially as high crude prices is sustained by a potential elongation of the Russian-Ukraine war, we expect the Current Account Balance to strengthen even further. This will be backed by our resolute effort to strengthen and improve real non-oil sector productivity through apt diversification to reduce undue imports.

Given the global and domestic headwinds, he said we face as a nation, and the volatility in the global environment, we have no other option, as leaders interested in the progress of our nation, but to work very hard to spur job creation by reviving agricultural and industrial activities in the country. Like I have said many times before, if we continue to support the growth of small holder farmers, you can only imagine the amount of wealth and jobs that will be created in the country. If we turn a blind eye to the opportunities provided by our enormous human and material resources, this could spell doom for our nation.


In conclusion, CBN Governor say that over the last two years, the global order and macroeconomic conditions have become increasingly challenging and distressfully tumultuous.  He further noted that these portend a huge downside risk for the prospect of the Nigerian economy adding that we are thus reminded of the need to look inward in developing policies that will correct the fundamental failures that have undermined our economy.


“I call on all of us, to put on our thinking caps, and find imaginative solutions that will ensure a Nigeria of our dream, where balanced growth and shared prosperity is guaranteed for all.


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