![](https://i0.wp.com/realnewsmagazine.net/wp-content/uploads/2023/02/image-525.png?fit=301%2C167&ssl=1)
Fx market: Economists say repositioned CBN will attract investors, operators confidence
Economy
ONLY a Central Bank of Nigeria (CBN) with reputation for competence will attract the confidence of investors and operators into the Nigerian market, say some economists.
They made the assertion at a seminar organised by the Association of Capital Market Academics of Nigeria (ACMAN), virtually, on Tuesday.
The experts said that a lot of investors who left the country, did so because they lost confidence in the apex bank and did not know what the exchange rate market would look like.
The forum has “Mitigating Reputation Risks in Financial Industry Regulatory Institutions (Focus on CBN)’’, as its theme.
The News Agency of Nigeria (NAN) reports that the aim of the discussion is to evaluate the extent to which the CBN was able to attend to its objectives or fulfill its mandate, beginning from 2015, as stipulated in Section 2 of the CBN Act.
It mandate includes maintaining price and monetary stability, issuing legal tender, ensuring that the financial systems are stable, maintaining the external reserves in order to preserve the value of the currency, acting as banker to the Federal Government and also giving advice to the government.
Prof. Magnus Kpakol, former Chief Economic Adviser to President Olusegun Obasanjo, while looking at the CBN mandate, said that Nigerians had since 2015 suffered a problem of risks due to wrong implementation.
“What we need to do is to realise that the problem we have in the country is that we are not productive enough.
“The reason why we have the shallowness in our reserves, the reason why we have GDP growth not being strong, especially expressed in the case of agricultural growth, where we stay well below three per cent over the last several years. I can’t remember any time where we grew anywhere near five per cent.
“So, we’ve got to have a CBN, going forward, that is able to sit down with the executive, sit down with players on the fiscal side and try to work with them in harmony, in a way to promote more productiveness. We have to increase the amount of output,’’ he said.
He urged the federal government to appoint a CBN governor that understands developments, international and political economic as well as the know-how to work well with the fiscal side of the equation.
Mrs Toyin Sanni, Chief Executive Officer, Emerging Africa Group, said that if the apex bank wanted to achieve desired goals, there was the need for the management and indeed the entire financial sector to work in harmony.
“If we cast our mind back, prior to this administration, it appeared that we had proactive management of our currency valuation, such that we retained the confidence of international investors. This is because we were perceived as proactively making the adjustments needed to be made at the right time.
“So, over time, that confidence was there and we did not lose foreign investments, and now there has been a reversal.
“So, those are the areas, among others. Going forward, we would like to see more proactive, more sensitive, more consultative management of the central bank, to achieve desired results,’’ she said.
Mr Johnson Chukwu, Chief Executive Officer, Cowry Assets Ltd., advised that a system that would measure the performance of the central bank midterm should be built, to allow it to give a report card of how it performed on its mandate.
“The key thing is to see how we will build the structures that will prevent a future central bank governor from repeating the mistakes of the immediate past governor and I think the starting point will be in terms of the accountability of the central bank governor.
“Anybody who is appointed as a CEO of a company will agree on performance terms with the board, and those key performance indicators will be measured at regular intervals.
“ As it stands today, the performance target of the central bank is not specified and not measured. We have in broad terms the roles of the central bank, which we said is price stability, financial system stability, policy management, as well as lender of last resort to the federal government.
“It also include contributing to the economic growth because one of the roles of the central bank is to ensure economic growth. So, the question is, do we have a system that will measure the performance of the Central Bank Governor midterm?
“I think we have to build that. So that after the first two years of being on the saddle, the central bank governor is supposed to give a report card of what it has done in terms of delivering on those parameters of the central bank,’’ he said.
Prof. Auwalu Haruna, Director, Ahmadu Bello University Business School, Zaria, urged the central bank to ensure its policies and decisions were well communicated, to avoid conflicts of policy.
This, he said, was fundamental when looking at the upsides.
Haruna also said that there was need to deepen and develop the financial market, especially the Small and Medium scale Enterprises (SMEs).
He said, “importantly for a developing nation, the SME sector is too important for us to ignore. We must find a way to develop the sector in a way that will provide a very more robust working and employment opportunities across.
“Fundamentally, if we want to even strengthen our foreign exchange, we need to look at the productive sector production role, another growth role of the CBN.
“We need to very clearly understand that it is not only promoting exports, when we promote export, you are trying to raise FX to buy more inputs, otherwise it makes no sense.
“So, we must find a way to come up with the business models in agriculture and in equipment production, whereby we will greatly substitute inputs. Clearly then we can see how our Naira would become stronger than it is today,’’ he said.
Besides, he urged the CBN to strengthen the risk management not only within the banking sector but in all the financial system that it operated by coming up with a modern modelling technique of risk management.(NAN)
A.
Related Posts
![](https://i0.wp.com/realnewsmagazine.net/wp-content/uploads/2024/09/image-280.png?fit=293%2C171&ssl=1)
Fuel increase: Nigerians in state of economic hardship – Calabar residents
THE people of Calabar have decried the increase in the pump price of Premium Motor Spirit (PMS), saying that Nigerians...
Read More![](https://i0.wp.com/realnewsmagazine.net/wp-content/uploads/2024/09/image-145.png?fit=275%2C183&ssl=1)
Fuel price hike will worsen hardship facing Nigerians – Imo residents, commuters
SOME Imo residents have expressed deep worry over Tuesday’s hike in the pump price of Premium Motor Spirit, popularly called...
Read More![](https://i0.wp.com/realnewsmagazine.net/wp-content/uploads/2023/02/Economic-Commission-for-Africa.png?fit=375%2C134&ssl=1)
African cities vital to continent’s economic, social development – ECA
AFRICAN cities are vital to the continent’s economic and social development, contributing over 50 per cent of its Gross Domestic...
Read MoreMost Read
Subscribe to Our Newsletter
Keep abreast of news and other developments from our website.