Let the blame game begin!
The Central Bank in its monetary policy communique today revealed it is going to adopt a “greater flexibility in the inter-bank foreign exchange market structure, and to retain a small window for critical transactions.” The announcement was in no small measure an admission of defeat by the CBN, further confirmation that their policies over the last year have more or less failed.
As a matter of fact, the CBN predicted that a recession was imminent by the time the second quarter GDP result is released, an admission of policy failure and an acceptance of fait accompli.
With some of the conditions that led to the contraction in Q1, 2016 still largely unresolved, the weak outlook for growth which was signaled in July 2015 could extend to Q2.
Despite his admission, the CBN Governor Godwin Emefiele appears unwilling to shoulder the blame alone. He blamed the negative GDP growth rate, and other economic travails being suffered by Nigerians on the Government’s inability to pass the budget. Emefiele would have us rather not blame his policies, but place the blame on economic challenges faced by the country. Here is an excerpt of the MPC Communique.
- The CBN is basically saying that price hike for consumer goods hampered the ability of businesses to invest.
“In the first quarter of 2016, the economy suffered from severe shocks related to energy shortages and price hikes, scarcity of foreign exchange and depressed consumer demand, among others.Consequently economic agents could not undertake new investments or procure needed raw materials.”
- Low oil prices ensured foreign reserves was very low
Shortage of foreign exchange arising from low crude oil prices manifested in low replacement levels for raw materials, other inputs as well as new investments.
- Bombings and pipeline vandalization affected gas production required for generators to generate power
In addition, the energy crisis experienced in the first five months of the year, resulted in increased power outages and higher electricity tariffs, as well as fuel shortages; which led to factory closures in some cases.
- The budget fiasco which led to its continued delay failed to provide the right stimulus required to revive the economy
The prolonged budget impasse denied the economy the timely intervention of complementary fiscal policy to stimulate economic activity in the face of dwindling foreign capital inflows.
In summary, and according to the CBN, once the above issues are resolved, the economy will perhaps bounce back. Emefiele admitted that there is nothing that the CBN could do within its powers to change things.
Aggregate credit to the private sector remained highly tapered while credit to government grew beyond the programmed benchmark for the period. The Committee, however, noted that many of the prevailing conditions in the economy during the review period were outside the direct control of monetary policy, but hopes that the implementation of the 2016 Federal Budget, supported by relevant sectoral policies and easing supply shocks in energy and critical inputs, would provide the needed boost to the economy.
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I says the Gov. of the C.B.N. is talking rubbish.the reasons are multiply,for so long various govt and govt officials through complency and buried their head in sand or rather a quick sand.hoping this little problem will go away.now the chicken is coming to the roost for Nigeria govt
Now the fact is that the economy is shrinking,since as early as feb.last year.NOW WHAT IS THE PROBLEM, AND THE CA– USES OF THE PLOBLEM AND ASK THE SOLUTION FOR THIS PLOBLEM.
The governor is not an academic like professor soludu,or from govt system.he is not a career govt official,he came from the private sector.he was the chief executive officer of zenith bank.Two previous Gov, was choosen by former presidents with the hope for them to uses their experiences/skills and their existences to drive the economy through the private sector
Any leader in any postion, political,.private or public sector, army.police is choosen in any organization to do HIS JOB TO THE BEST OF HIS ABILITY AND IF HIS JOB MEANS HE MUST INSPIRES HIS FOLLOWERS TO ACHIEVE THEIR OBJECTIVES.
Now I do not see any fu..cking problem for the gov, of the central bank of Nigeria,if he cannot fulfill his responsibilities to Nigeria, and Nigerian,he should offer his resignation to president Buhari,telling him. “MR PRESIDENT I HAVE FAILED YOU, AND I HAVE FAILED NIGERIA “in japan if a samurai fails his lord/shogun, he simply cuts his stomach. called hakari.he disembowels his stomach on the ground.
THE PRESENT GOVT INHERITED A MESS CREATED BY THE PREVIOUS GOVT,AND IT’S GOING THROUGH A PROCESS OF ECONOMIC REBLANCING AND CORRECTION,AND IT WILL TAKE 2 YRS TO 5 YRS TO REDEEMED THE ECONOMY,meaning the economy could result in recession,within this period.
This is why I am critical of this govt and the cabinet.THE QUESTION NOW IS THE NATION WILLING TO AFFORD A RECESSION, WHICH IS QUITE VERY LEGITIMATE.let me borrow a phrase from Mr Ben Okri poem that Africa or Nigeria is liken to a famished dream,or professor Soyinka prose that Nigeria is like a sore or an ulcer on the continent of Africa.
The choice is your Mr Governor,however the governor must see the essence of everything,otherwise Nigeria will not move forward “if this systemof allocation of forex,the setting of bank interest rate,how deposit in Nigerian bank is not working “why not devise a systemthat will achieves it’s objective,that will make Nigerians happy and proud that I am a proud Nigerian
The economy according to this website,says Nigerian economy did grew about 30 % in 2004,and the main reason is I think that Nigeria had access to credit facilities through the booming Nigerian stock market, and it start to stall,a good idea is for the govt give more power to the economy then,that is why where we are,and the economy becomes edgy.THE FACILITIES AND STRUCTURES THAT WILL ABSORBE ANY ECONOMIC CYCLICAL DOWNFALL,DOES NOT EXISTS