Recession: Group Defends Emefiele, CBN’s Monetary Policies on Recovery

Paul Obi and Peter Omale in Abuja

As Nigerians continue to bemoan the hardship brought about by the current economic recession, a coalition of Civil Society Organizations (CSOs), monday defended the monetary policies of the Central Bank of Nigeria (CBN) and its Governor, Godwin Emefiele, geared towards recovery.

Speaking to Journalists monday in Abuja, President of the group, Mr. Etuk Bassey Williams and Secretary, Abubakar Ibrahim, said though the economic hardship affects all Nigerians, criticisms targeted at the apex bank and Emefiele were misplaced given the various monetary policies put in place to address the crisis.

They said: “We have watched the ongoing economic developments in Nigeria with keen interest and understand that they were triggered by exogenous conditions and weakening global environment. We note that the underlying shocks are affecting, not only Nigeria, but a lot of emerging market economies and commodity exporting countries.

“For one, Nigeria has largely depended on oil and the weakening global conditions are affecting crude oil demand and crude oil prices adversely. The deceleration in China and other key economies are critical in this instance as well as the USA’s discontinuance of the purchase of Nigeria’s crude oil.

“We note that the reduction in global growth and production of shale oil around the world has led to a sharp reduction in the price of crude oil from a peak of $116 per barrel in June 2014, to under $50 per barrel as of September 2016.

“However, it remains the duty of Nigeria’s economic managers to rebalance the economy and see us through these challenges so that we can emerge as a better economy,” They stated.

Williams further stated that notwithstanding the challenges, “it seems to us that those entrusted with the management of this economy are bereft of creative ideas on way forward or, worst still, do not understand the complexities of the current challenges.

“As far as we know, macroeconomic policies are divided broadly into monetary and fiscal. The fiscal authorities are generally entrusted with the responsibility of ensuring economic robustness including sound growth, vast employment, infrastructure development, trade policies, structural policies, and a welcoming business environment.

“While it is neither our duty nor our intention to defend one organization or the other, we cannot help but notice the scapegoating and asymmetric blaming of the CBN for the conditions of the Nigerian economy. As far as we are concerned the CBN has its own shortcomings one of which is its attempts, through quasi-fiscal activities, to assume the duties of other counterparties in the economic management endeavour.

“But I guess they have resorted to doing so because nature does not allow vacuums. If others are not doing their jobs, maybe someone has to do.:

He added that “whatever the case is, we believe that this disproportionate blame-game should stop now. We call on all relevant bodies that must make up the economic team to, henceforth, direct efforts to creative, innovative, unconventional and non-textbook solutions to the problems.
“To the best of our understanding, the mandate of the CBN is to maintain stability of prices, monetary conditions and financial system; some of which require medium term horizon.

The CBN has not only made visible attempts at its bi-monthly Monetary Policy Committee meetings at working towards its mandate, it has also ventured in quasi-fiscal duties to fill the gap created by indolent and inept organizations.

“For instance, we are aware of its various interventions in agriculture sector, in power, in Micro, Small, and Medium Enterprises, in Education, and in Aviation. The bank has consistently bailed out entities in these sectors and others. More recently,we are aware of the bailout of states,which is an almost monthly occurrence now.”

Williams also explained that “these are states, whose governors have failed to be responsible and creative in the managing their economic resources.

“States which have enormous potentials but fail to soil their hands in order to build sustainable IGRs; rather preferring to depend on allocations from the ever decreasing crumbs of national cake. We find it insulting that some of these state governors blame others for the dwindling performance of the economy.

“We find it heart-warming that there is an organisation, like the CBN who is making little but commendable efforts at the recovery of the nigerian economy. This is an institution that has historically prided itself with initiatives to promote the domestic economy.
“However, it is important to note the unsavory and divisive comments by ex-governors of the CBN, particularly Prof. Charles Soludo and HRH Sanusi Lamido Sanusi, condemning some decisions and actions of the Bank.

“We are of the view that, save for mischief and cheap mentality, these individuals ought to approach their successor, the current CBN governor, and share their views on an appropriate way forward. That would have been a more pragmatic, respectable and distinguished action, rather than running to the press to castigate an organisation that they once headed.

“Where is the camaraderie? Where is the deep love for the organization you once guided? If we are to blame , then we should ask Soludo questions on the phony and shallow bank consolidation which he oversaw. We should ask him questions about his decision to sell foreign exchange to BDC; an unproductive venture that depleted our reserves by more than $66 billion.”

The group observed that “besides, we are not oblivious of the real reasons why Sanusi’s reign as CBN governor was suspended; the unscrupulous dealings which he ratified during his administration.
“But we are not here to defame anyone. The coalition of civil societies doesn’t assume the duties of a disparager. We concern ourselves with productive activities and movements. Thus, we want to call on all concerned Nigerians, the CBN, the Ministry of Finance, Ministry Budget and National Planning, FIRS, Ministry of Industry Trade and Investment, past CBN governors and all others charged with the management of this economy to come together and work as a team.

“The time for blames and castigating is over. This is a time to work; a time for critical and productive thinking. We need to see visible, innovative and implementable fiscal policies, structural policies, and industrial and trade policies to complement the monetary policy of the CBN. We believe that the current interventions and bailouts by the CBN is a step in the right direction.

“We also are of the view that the current attempt by the CBN to curb the importation of frivolities and to strengthen domestic productivity should be supported. We want to see a collective effort that will lower inflation, increase economic growth and bolster job creation.”
They held that “monetary,fiscal and industrial policies should be viewed correctly as macroeconomic policies. There is need for genuine synergy and a discard of self serving tendencies and inept blame games among those that should provide solutions.

“We therefore call on all well-meaning and ordinary Nigerians to support this call for cooperation, collaboration and coordination; and to desist from distractive, unproductive and unpatriotic denunciation of the CBN and other agencies.”