•Moves to grow $1tn economy in eight years
•Harps on need for fiscal discipline
Sunday Aborisade in Abuja and Nume Ekeghe in Lagos
The Senate yesterday, confirmed President Bola Tinubu’s nominees for the position of Governor of the Central Bank of Nigeria and deputy governors of the apex financial institution.
In his opening address, Mr. Yemi Cardoso promised to pursue reset, evidence-based monetary policy and measures to address challenges in the country’s foreign exchange (FX) market and stabilise the exchange rate.
The appointment of Cardoso as Governor of CBN was confirmed alongside Emem Nnana Usoro, Muhammad Sani Abdullahi Dattijo, Philip Ikeazor and Bala M. Bello, as deputy governors.
The Senior Special Assistant to the President on National Assembly Matters (Senate), Senator Abdullahi Gumei, led the nominees into the Senate chamber shortly after the senators emerged from a lengthy close door session.
In his remarks, Cardoso said he had the privilege of serving as the chairman of Citi Bank from 2010 to 2022, where he dedicated himself to enhancing both the financial and non-financial aspects of the institution.
He described the current exchange rate in Nigeria as very worrisome but pledged that the new management of the apex bank would come up with rules that were open and transparent to the players and stakeholders in the economic sector to understand.
He identified short, medium and long term strategies to address it.
He said, “On the issue of foreign exchange which everybody has been talking about, it is very worrisome to everybody.
“It goes without saying that for the sort of country we want, we need to have an exchange rate that is very stable for a country that we all dream of.
“There are short and medium term measures. The major short term measure has to do with balance of payments over a period of time like the sort of things that are being done already with respect to ensuring that we are getting more petroleum resources and diversifying in the economic base of the country.
“That, I believe, will continue by the present administration and of course it will take time I think we should take that as a medium term approach.
“There are two very important issues that we will have to address if we are confirmed.
“It is what I will term un-correlational issues. We are aware that there are unsettled obligations by the CBN. Whether it is $4 billion, $5 billion or $7 billion, I don’t know but definitely the immediate priority is to ascertain the extent.
“We need to find a way to take care of that. It will be naive for us to be expecting to succeed if we are not able to handle that side of the foreign exchange market.”
Speaking further, he said: “Secondly, we have to be transparent so that any of the players in that market will understand. We have to come up with rules that are transparent also.
“You cannot reasonably expect serious foreign investors, portfolio investors full direct investment, without addressing the short term measures.
“Those players who will have direct impact on our market will not do so if we do not have an open transparent system that everybody understands, that can be relied upon, and which is not subject to review at will without the involvement of critical stakeholders.
“In setting up those guidelines, one will also have to carry stakeholders along. We should be ready to engage people and share views. That I think should be a major objective to get stakeholders together and share views.
“The two things appear simple but are far more important than they appear. Those two are the immediate steps that we will take, that will go a long way to ease off the situation that we are having right now in terms of wanting investors to come in.
“Those that want to do business in Nigeria they want to see this is clear and if they don’t, they will hold on to their money.
“These are the short term measures that will be very important to us once we get in, it is what we will address.
“I know that the impact will engender greater liquidity coming into the market, those seeming withholding confidence will come back here. They will see that the coast is clear and if not they hold onto their money.
“We cannot reasonably expect that serious foreign investors, portfolio investors who generally have an impact on our market will do so if you do not have an open, transparent system that everybody understands and can rely on,” he said.
On the issue of inflation and rising cost of goods, Cardoso said the new management team of the CBN would adopt evidence-based monetary policies.
He said, “There is the need to significantly revamp the infrastructure in the central bank with respect to data and to ensure that our data gathering capacity is significantly enhanced so that we can make decisions based on proper data. This is key in measuring inflation.”
He noted that relatively, reliable studies had shown that in the past 10 to 15 years, at least 50 per cent of inflation had been as a result of money supply and deficit financing.
He said, “This is a big problem, at least it certainly has been over a period of time and it’s something we have to face frontally.”
He added that the CBN would ensure that the issue of deficit financing would not be a problem for the country.
“There are longer term measures there are shorter term measures and I believe that some of those measures are being taken already,” he said.
Cardoso, enumerated plans to help President Bola Tinubu’s administration to achieve its projection of $1trillion GDP growth within eight years.
He said, “What is important to us is the element of economic growth. Our feeling is that in identifying the important issues with economic growth, we believe very strongly that size matters.
“The economic policy proposal of the administration identified a set of physical reforms and growth patterns that will be achieved in $1 trillion GDP within eight years.
“In reviewing selected growth targets that can achieve $1 trillion GDP growth in comparison with selected countries with large population and similar characteristics as Nigeria, it is interesting to identify micro-economics indices that point to Nigeria’s economic trajectory being faithful to implementation of the proposed economic reforms.
“In economies bigger than $1trillion these indices include moderate inflation, sizeable foreign reserves and capacity to creating rebound from economic downturn.
“The (Tinubu) administration has identified such a bold target for the country, it is our feeling that achieving this is very critical to achieving the stability that we require in various economic indices, it is not the only thing but it is very important. So we believe that this is the right way to go.”
He said the new CBN team would invest heavily on data gathering to enhance adequate forecast.
“We will be going to evidence-based monetary policies, we shall not be making decisions based on whims.
“I believe that to significantly revamp the infrastructure of the central bank with respect to data and to ensure that our data gathering capacity is significantly enhanced so that we can make decisions based on data, that is key in determining the rate of inflation.
Speaking further on inflation. Cardoso said: “On the issue of inflation and the price of goods, the jury is out, some people will say structure, some others will say it is money supply issue. Truth is, it is a combination of both.
“If indeed it is food inflation we need to ramp up food production. That is the effort that the fiscal side will tackle and it is tackling and we will collaborate with them to ensure that it happens.
“If it is energy we know the challenges of energy that if you were importing things into the country that has energy component, automatically you are importing inflation.
“The whole objective of ensuring that the energy side of the country is ramped up. We will also work very closely with the fiscal side to ensure that it happens.
“The big issue is the issue of money supply and the way that money has gone up tremendously in Nigeria. That on its own has major effect on inflation,” he added.
“Going forward from the Central Bank of Nigeria, we will do everything possible to ensure that we work closely with the fiscal side and ensure that the issue of deficit financing does not become a problem to us. We cannot afford to have the big challenges from fiscal deficit financing,” he stressed.
In their brief introductions, the deputy governor nominees presented their credentials to the admiration of the lawmakers.
Emem Nnana Usoro from Akwa Ibom State, said she emerged as the executive director of the United Bank of Africa having risen through the ranks.
Muhammad Sani Abdullahi Dattijo, from Kaduna State, said he was economic planning and budget Commissioner in Kaduna State for seven years having served as economic policy adviser in the United Nations.
Philip Ikeazor from Anambra State said he had served as a General Manager in the UBA. and Managing Director of Keystone Bank for four years.
Also, Bala M. Bello from Taraba State, said he recently resigned his appointment as executive director of Nigerian Export Import Bank having served for seven years having 27 years cognate experience in global finance sector.
Earlier in his remarks, President of the Senate said the Senate had reconvened from its annual recess to consider expeditiously, and confirm the nominees.
He said that the expeditious confirmation was also as a result of the emergency resignation of the former CBN Governor, Godwin Emefiele.
He urged the Senate Committees on Finance and Banking, Insurance and other Financial Institutions to carry out a thorough oversight of the apex bank.
Meanwhile, naira declined on both the parallel and official I&E window of the FX market.
Specifically, the nation’s currency weakened to N1000/$1 on the parallel market and closed at N755.08/$1 on the official I&E window.
On the parallel market, the exchange rate stood at N1000/$1, which was a N5 decline compared to the previous day’s rate of N995/$1.
On the other hand, on the official I&E window, it closed at N755.08/$1, a drop from the N773/$1 it closed on Monday.