Emefiele outlines CBN priorities for 2020

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Emefiele
Emefiele

By Anayo Ezugwu

GODWIN Emefiele, governor, Central Bank of Nigeria, CBN, has unveiled the banks’ priorities for 2020. He said in 2020, the CBN would support greater economic growth, price and exchange rate stability and low inflation through a series of policies that would grow the nation’s non-oil exports.

Speaking at the 54th Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria, CIBN, in Lagos, Emefiele said the CBN would address some of the barriers facing the non-oil exporters in producing goods for the export market working with the Nigerian Export-Import Bank, NEXIM. He said in spite of the positive growth the economy experienced, growth had remained slow due to some structural constraints in the economy.

According to him, the pace of growth, given Nigeria’s growing population, has exposed the economy to shocks, such as changes in the oil price, and sentiments in the global financial markets. Emefiele disclosed plans by the CBN to support the economic recovery and enable stronger growth for the country’s Gross Domestic Product, GDP.

He said the apex bank would continue its current tight stance, particularly in view of rising inflation expectations. “Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, the CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilization,” he explained.

Doing a recap of the highlights for 2019, Emefiele recalled that the country’s GDP had remained positive, adding that the positive growth in GDP had been driven by improvements in Agriculture, Oil and Gas, Manufacturing and ICT as well as the intervention programmes of the CBN, along with sustained supply of foreign exchange and stability of the naira.

He also attributed the decline in inflation to the Bank’s maintenance of a tighter monetary policy rate at 13.5 percent, and its efforts at improving local production of key staple items.

He further said the Nigerian financial system was now stronger due to the fact that capital buffers and liquidity in the banking system have continued to improve. According to him, industry-wide Capital Adequacy Ratio, CAR, had increased from 10.2 percent in December 2017 to 15.5 percent in September 2019. He added that the percentage of non-performing loans in the banking sector had reduced from a high of 14.7 percent in January 2017 to under seven percent as at October 2019.

Emefiele equally disclosed that credit conditions in the banking system had improved, supported by the CBN’s new policy measures announced in June 2019, which require banks to maintain a minimum 65 percent loan to deposit ratio. Furthermore, he said banks in the country were now able to recover delinquent loans from customers’ accounts in other banks, adding that the measures now placed Nigerian banks in a much better position towards supporting a stronger economic recovery. This, he added, had increased gross credit by N1.16 trillion between May and October 2019.

On the country’s External Reserves, the Governor said the Bank’s effort at supporting domestic production in the agriculture and manufacturing sectors among other policies, had continued to encourage foreign exchange inflows into the Nigerian market. According to him, over $60 billion worth of transaction had taken place since the inception of the Investors’ and Exporters’ window in April 2017, adding that Nigeria’s foreign exchange reserves were above $40 billion as at October 2019, compared to $23 billion in the same period in 2016.

The Governor also highlighted the Bank’s effort in development financing, which he said, the CBN had sustained in order to help support growth in critical sectors of the economy such as agriculture and the manufacturing sectors, through programmes such as the Anchor Borrowers’ Programme, the Commercial Agriculture Credit Scheme and the Bankers Committee Agri-Business/Small and Medium Enterprises Investment Scheme, AGSMEIS.

Emefiele used the occasion to announce the establishment of a Bankers’ Charitable Endowment Fund that will fund a major charitable initiative every year starting in 2020. According to him, the Bankers’ Charitable Endowment will directly fund strategic social programmes in states and local communities across Nigeria. He expressed the hope that the Fund would spur a trend across other industries and sectors to collaborate and work together to better the lives of all Nigerians.

– Dec. 04, 2019 @ 01:57 GMT |

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