The Nigerian-British Chamber of Commerce (NBCC) has advocated for the building of a coherent monetary policy framework strategically targeted at improving economic growth and national development.
Bisi Adeyemi, NBCC president and chairman in Council in her opening speech at a virtual roundtable highlighted that Nigeria’s economy before now was highly dependent on oil as the major source of government revenue and foreign exchange earnings.
“Over the years, for various reasons, we have witnessed significant depletion of the country’s foreign reserve, and so there is need to strategically come up with policies that address the gap.
The NBCC Business Advocacy Roundtable was designed to examine the issue of building a coherent monetary policy framework for national growth and development. Two subject matter experts Marco Hernandez, lead economist for Nigeria, World Bank, and Hassan Mahmud, director, Monetary Policy Department, Central Bank of Nigerian, were specially invited to dissect the issues.
Responding to a question by Toyin Sanni, the moderator, on how the CBN rates itself against its set objectives, Mahmud explained that the CBN is effectively managing the countries interest rate regime, which is critical to the real sector and for providing attractive investment environment.
He added that in trying to tackle the exchange rate volatility and manage other CBN functions, they have employed monetary targeting options including open market operations, liquidity forecasts templates, and others with the aim to bringing down inflation.
Mahmud said though short term measures may be deployed but the structure of the economy has a role to play in the effectiveness or otherwise of these measures.
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For him, “Every economy must have set objectives and set the framework to achieve those objectives. Our policies are geared towards making the country export-driven rather than import-dependent. We should then look inwards to grow the Nigerian economy, to a competitive level to enable it play at the global stage. We must then play at a global standard. If we do not look inwards, if we do not take our destinies in our hands, we will have ourselves to blame.” He believes that the Nigerian economy must be developed first, before we start talking about addressing the exchange rate.
Marco Hernandez, in his contribution, posited that Nigeria, currently, is at a critical juncture where it must take critical decisions to act.
He said that Nigerians cannot continue to operate as a business as usual, otherwise, “they can only expect the same kind of growth experienced since 2015, which will continue to witness a decline in per capita income and limited job creation.”
He added that Indonesia that shares similar characteristics as a country took a different policy trajectory and arrived at a different outcome. This means that for Nigeria to achieve a more progressive economic growth and development the country must reconsider some of her present monetary policies that will make it possible to achieve the expected growth curve. Nigeria would need to create the necessary environment for investment, halt inflation, and create more jobs. Nigeria should take action to halt the declining economy,” he added.
Hernandez advises that Nigeria should, in the next six to 10 months, bring down the level of her inflation rate; enhance its foreign exchange auctioning process to help investors make their investment decisions; look at the connection between trade and inflation; and increase its domestic added values. He also advocated for Nigeria to examine very closely her policy interventions in the areas of exchange rate management, trade, fiscal and monetary policies, and also re-evaluate the issues of social protection. This discourse was sponsored by Bank of Industry and Boston Consulting Group.
