CBN Reveals Five-Year Strategic Plan …Eyes Double-Digit Growth, Single-Digit Inflation

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, disclosed this in Abuja, Monday, while briefing the media on his agenda for the next five years. According to him, the 2004 recapitalisation undertaken by former CBN Governor, Prof. Charles Soludo has weakened, substantially.

His words, “In the next five years, we intend to pursue a program of recapitalising the Banking Industry so as to position Nigerian banks among the top 500 in the world. Banks will therefore be required to maintain higher level of capital, as well as, liquid assets in order to reduce the impact of an economic crisis on the financial system.

 “It was Governor (Chukwuma) Soludo, in 2004 who did the last recapitalisation we had. Moving the capitalisation from N2 billion to N 25 billion. “I must commend that effort because it resulted in positioning Nigerian banks, not only in Africa, but to become among top banks in the world, in terms of capitalisation.”It also increased helped the strengthen the banks to take on large transactions and those are the things they badly needed. The wrong way to defend the naira(Opens in a new browser tab)

 “Today, when you relate N25 billion in 2001 exchange rate, which was about N100/$1, N25 billion was about $200 million . Today if you relate N25 billion at N360/$1, you can see that it substantially lower than $75 million . “What we are trying to say is that the capitalisation has weakened quite substantially and there is need for us to say it is time for us to recapitalise Nigerian banks again. ‘Kudimoney’ gets CBN license, rebrands to ‘Kuda’(Opens in a new browser tab).

 “It is a policy thrust which will be discussed at the Committee of Governors’ Meeting and of course the frame work for the recapitalization of Nigerian banks would be unfolded for the whole world to know.”

 . The governor said that in the next five years, his team would work closely with the fiscal authorities to ensure a stable macro-economic stability, double-digit growth, single-digit inflation and greater access to finance for businesses.

Emefiele said, “Working closely with our fiscal authorities, we pledge to target a double digit growth by the next five years and at the CBN, we commit to working assiduously to bringing down inflation to single digit; while accelerating the rate of employment.

 “Put succinctly, our priorities at the CBN over the next 5 years are the following; First, preserve domestic macroeconomic and financial stability; Second, foster the development of a robust payments system infrastructure that will increase access to finance for all Nigerians thereby raising the financial inclusion rate in the country; Third, continue to work with the Deposit Money Banks to improve access to credit for not only small holder farmers and MSMEs but also Consumer credit and mortgage facilities for bank customers.

 “Our intervention support shall also be extended to our youth population who possess entrepreneurship skills in the creative industry.” On the management of the foreign exchange, he said , “We will continue to operate a managed- float exchange rate regime in order to reduce the impact which continuous volatility in the exchange rate could have on our economy”

The CBN, the governor said, he would support measures that would increase and diversify Nigeria’s exports base and ultimately help in shoring up our reserves, particularly by supporting domestic industries and creating jobs on a mass scale for Nigerians.

The Governor said, “We intend to aggressively implement our N500bn facility aimed at supporting the growth of our non-oil exports, which will help to improve non-oil export earnings. “Will launch a Trade Monitoring System(TRMS) in October 2019, which is an automated system that will reduce the length of time required to process export documents from 1 week to 1 day. This measure will help support our efforts at improving our non-oil exports of goods and services.

“We will also work with our counterparts in the fiscal arm in supporting improved FDI flows to various sectors such as agriculture, manufacturing, insurance and infrastructure. These measures while supporting improved inflows into the country, will help to stabilise our exchange rate and build our external reserves.”

Mr. Emefiele said that his team would boost productivity growth through the provision of improved seedlings, as well as access to finance for rural farmers in the agricultural sector, across 10 different commodities namely: Rice, Maize, Cassava, Cocoa, Tomato, Cotton, Oil-palm, Poultry, Fish, and Livestock/Dairy.

He said, “Our choice of these 10 crops is driven by the amount spent on the importation of these items into the country, and the over 10 million jobs that could be created over the next 5 years if efforts are made to expand cultivation and processing of these items in Nigeria. So far, we have held series of engagements with importers and producers of these products.

“Most of them have committed that they would install or expand their production capacities in Nigeria. We believe these measures will help to boost not only our domestic outputs but also improve our annual non-oil exports receipts from $2 billion in 2018 to $12 billion by 2023.”

He added that CBN would support an aggressive embroilment of prospective banking customers in the informal sector on to the BVN system and move the current enrolment of 38 million unique banking customers to 100 million over the next 5 years.

Emefiele said that the consumer credit programme would be pursued more vigorously, including mortgage at 9 per cent interest.

Leave a Response