…what Cardoso should do as CBN Gov – experts
The Senate has confirmed Dr. Olayemi Michael Cardoso as the Governor of the Central Bank of Nigeria (CBN).
Also confirmed are Mrs Emem Nnana Usoro, Mr Muhammad Sani Abdullahi Dattijo, Mr Philip Ikeazor, and Dr. Bala M. Bello as deputy governors of the apex bank.
They were confirmed following their screening in the Committee of the Whole in the Senate chamber
On September 15, President Tinubu approved the nomination of Cardoso to serve as the new Governor of the Central Bank of Nigeria (CBN).
He also approved the nomination of four deputy governors for a term of five years each at the first instance, pending their confirmation by the Senate.
What Cardoso should do as CBN Gov – experts
There is a consensus that the Dr Olayemi Cardoso-led new management of Central Bank of Nigeria (CBN) must move quickly to address the triad of foreign exchange (forex), inflation and interest rate to support the nation’s economic recovery.
As the new management resumes their first full working day today, experts were unanimous that the immediate tasks before the new management were provision of clear policy directions and strong implementation templates to address key macroeconomic issues including forex, inflation and interest rate.
Finance and economy experts and public policy specialists surveyed by The Nation yesterday had a common central theme: arduous tasks, cautious optimism. They were also mostly in agreement in what should be the priorities of the new CBN management.
Although many experts noted that Nigeria’s macroeconomic challenges were more of fiscal than monetary, most agreed that the new CBN could work with the fiscal authorities to provide a comprehensive policy directions and working templates to address most of the issues.
Experts particularly pointed out the long-standing role of the apex bank as a catalyst for fiscal and monetary changes, noting that the fact that new top management members were selected by the pro-reform Tinubu’s administration raises hope of a congruence between fiscal and monetary authorities.
The experts included President, Chartered Institute of Stockbrokers (CIS), Mr Oluwole Adeosun; Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe; Executive Director, Investment Banking, Cordros Capital, Mr Femi Ademola and President, Association of Capital Market Academics of Nigeria (ACMAN), Professor Uche Uwaleke.
Others included Managing Director, APT Securities and Funds, Mallam Kasimu Kurfi; Managing Director, Globalview Capital, Mr Aruna Kebira; Chief Executive Officer, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf and Managing Director, HighCap Securities, Mr David Adonri
Experts were unanimous that the new CBN management has the requisite knowledge and experience to steer the affairs of the country’s apex bank, but they noted the urgency of the current macroeconomic tides and the need to quicken the pace of policy thought, formulation and implementation.
Adeosun said the floating of the naira must be better managed, especially now that the currency has gone as low as N1,000 per dollar.
“No country in the world allows its currency to go on total free float, and certainly, a developing country like Nigeria cannot afford it. We need to manage the float more strategically at this point, while we work on improving our local production base.
“The most effective way to strengthen the naira and arrest inflation is to significantly increase domestic production in the economy, and to do that you need long term financing and a strong public private partnership. To achieve these, you need a strong and virile capital market, and that should be one of the cardinal objectives of the CBN, working in collaboration with the SEC,” Adeosun said.
Amolegbe said the top priority for the new CBN team would be “to get a quick handle on the forex situation by defining clearly what the government policy is regarding exchange rate as well as working to improve supply in other to achieve stability”.
“This should help also encourage foreign investment and also get a handle on run-away inflation,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.
He added that the Acting CBN Governor would also have to design strategies to lower interest rate as highlighted by the president in order to improve production and manufacturing.
“He will also have to keep an eye on ensuring financial system stability as the industry faces medium term challenges from the impact of recent policies,” Amolegbe said.
Kurfi said the immediate tasks would be to “address the devaluation of naira and reduce inflation” through combination of monetary and fiscal policies.
Kebira said what should be paramount in the minds of the Acting CBN Governor and his deputies should be how to stem the escalating inflation and “to stop the fight between the naira and dollar from degenerating into another thing.
“Whether the stemming of inflation is best through the Monetary Policy Rate (MPR) or through CBN intervention should occupy their minds. Anything short of this is an indication that they did not hit the ground running. If the Nigerian economy is going anywhere, those identified issues are at the front burner,” Kebira said.
