By Obinna Chima
Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, on Saturday reiterated that the goal of the Bank was to achieve single digit inflation.
Emefiele said this at a roundtable session titled, “Going for Growth,” with private sector operators in Lagos.
The meeting had in attendance Governor of Lagos State, Mr. Babajide Sanwo-Olu; President of the Dangote Group, Alhaji Aliko Dangote; founder of Zenith Bank Plc, Mr. Jim Ovia; Chief Atedo Peterside and CEOs of banks and other leading private sector organisations.
Inflation rate in the country stood at 11.37 per cent as of April 2019.
But Emefiele, in his remark at the event said: “While we are delighted that we have been able to fight inflation down to very low double digits, we believe it is still too high for the Nigerian economy. Our goal is to moderate it down to single digits.
“More also, we need to keep in mind that Nigeria’s high interest regime reflects not only the cost of capital, but also the cost of doing business in the country.”
He cited example with a typical bank branch in the country which provides its own security with sometimes permanent police presence, its own electricity supply with several generators, diesel tanks and inverters and its own broad band internet services.
For banks whose main source of income is from interest earnings, these deficiencies become costs which it must necessarily pass on to borrowers, Emefiele pointed out.
“So regardless of what we do at the CBN, it is important that we realise other aspects of our business environment that promote and sustain high interest rates.
“Policymakers must therefore act with certain principles that ground and guide them especially in sometimes rapidly changing global environment.
“For example, not many people can claim to have foreseen the trade tensions between the USA and China, difficulties with Brexit, policy uncertainty and rapid spread of protectionist tendencies that the world now grapples with,” he said.
Furthermore, the CBN governor urged leaders and policymakers to strengthen their resolve over the coming years to stimulate growth and job creation by putting in place unconventional policies that would help insulate the economy from shocks in the global economy.
“It is in an attempt to stimulate such discourse that we decided to participate in this session today. I will therefore encourage participants to highlight important building blocks that will lead to greater economic growth in our beloved country.
“We are eager to listen to your ideas and views on how we can help improve productivity and investments by companies operating in Nigeria; reduce our dependence on imported goods that can be produced in Nigeria; and increase our exports of non-oil goods and services,” he added.