In an uncommon parley which began on Thursday, Nigeria’s monetary and fiscal authorities began discussions on how to forge a policy coordination that would hopefully drive the economy out of imminent collapse as growth, government revenues continue to receive intense bashing..
Discussions center around considering and properly designing an escape programme for the country in terms of what the government should do, the revenue sources available to government and how the benefits of lean available resources can be maximized to achieve an inclusive growth and cut down huge poverty levels and inequality in the country, BusinessDay was told.
Central Bank of Nigeria (CBN ) governor, Godwin Emefiele said the meeting- the Fiscal Liquidity Assessment Committee (FLAC) Retreat – was an occasion to reflect outcomes and challenges confronting the nation’s economy as he urged participants, including representatives of 28 states, the CBN, ministry of finance, Accountant General’s office, budget office, to work out strategies to ameliorate the kind of considerable exogenous shocks that are currently beleaguering the economy.
FLAC is a strategic committee of the CBN which provides an avenue for monetary and fiscal authorities to interact inorder to articulate policy decisions that are complementary rather than conflicting.
“The meeting avails us the opportunity to brainstorm and synthesize ideas on how to Restructure, re-orient, re-invent, and re-strategise in order to diversify our economy and shield the Nigerian economy from the vagaries of exogenous markets,” the governor stated.
“We should at this retreat take the opportunity to kick-start and set the tone for our renewed drive for fiscal sustainability and macro-economic stability.
There are fears that Africa’s largest economy is already in recession, having had its growth drop for the four consecutive quarters and could slip into a depression, especially as Buhari-led administration is yet to set the tone for any economic direction.
Another serious concern is even that the Nigerian monetary and fiscal authorities are often accused of lack or improper coordination of those policies that would drive growth and development.
Emefiele, speaking at the event, raised concerns that knock – on effect of recent global macroeconomic shocks has accentuated the urgent need for Nigeria to strengthen its economic fundamentals and attain self-sufficiency so as to ensure macroeconomic stability.
He noted that the fall in oil price and other commodities did not only diminish the current outcomes of the nation’s macro-economic but has the propensity to impair the nation’s prospects in the medium and long term.
He admitted in particular that the fall in oil prices has negatively affected revenue projections and in the short term, has amplified exchange rate pressures, due to a tapering of export receipts.
“The obvious ramifications of these unsavoury developments have remained a daunting challenge to fiscal and monetary policy management,” he lamented.
Emefiele drew attention to the principal objective of macroeconomic policy, which is to achieve sustainable and inclusive economic growth in a context of macro stability.
”To achieve this, monetary and fiscal policies need to assiduously play their respective roles while collaborating to ensure that public expectations are harmoniously and effectively anchored.
Moses Tule, CBN Director, Monetary Policy said the retreat was necessitated considering that the country is “presently suffering the adverse effects of the dwindling revenue from crude oil and gas sector, which today accounts for about 95% of its revenue.”
He noted that fallen global crude oil prices have orchestrated the depreciation of the naira and slight upward trend in inflation.
He said recent developments, including decling growth, naira depreciation, among others portend a negative signal for the economy, hence the need for both monetary and fiscal authorities to design an en efficient programme that would avert collapse of the economy.
Onyinye Nwachukwu
