Nigeria’s central bank will take “more limited advisory roles” and stay away from direct fiscal interventions in support of the government’s economic growth agenda.
Governor of the apex bank Olayemi Cardoso said the central bank does not have a magic wand that can be waved at the current economic challenges.
He said on Tuesday that the bank’s current approach made it hard to differentiate between monetary and fiscal policy. He said this undermined its ability to effectively manage inflation and foreign reserves.
Cardoso said there is a need to pull the central bank back from direct development finance interventions into more limited advisory roles that support economic growth.
However, he suggested the central bank could support growth in a variety of ways, including by catalyzing institutions and financial products to support emerging sectors of the economy, expanding financial inclusion, and bringing together multilateral stakeholders to support government and private sector initiatives.
Godwin Emefiele, the central bank’s former governor who was sacked in June, had kept the naira artificially strong and pursued monetary policy by providing liquidity to money markets through interventions.
Cardoso’s speech comes at a time of double-digit inflation, a sinking naira, and record debt in Africa’s most populous country.
Cardoso, Nigeria’s Central Bank Boss Says – We are Not Magicians
We are Not Magicians – Nigeria’s Central Bank Boss, Cardoso
Nigeria’s apex bank boss, Olayemi Cardoso said the central bank does not have a magic wand that can be waved at the current economic challenges.