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The Monetary Policy Committee of the Central Bank of Nigeria released its communique on Tuesday 20th of September at the Had Office of the CBN in Abuja.
In one of the most riveting communiques in the Emefiele era, the CBN finally came to terms with the failures of most of its policies shifting a huge portion of the blame to the Federal Government for lack of a clear-cut fiscal policy action. The CBN it appeared was finally sending a message to the FG that it was time they show up as all tools in its arsenal have been basically exhausted.
In fact, they opined that the monetary policies that they had prescribed was inadequate to address the main crux of the floundering economy. “Recognizing that the conditions which precipitated the current economic downturn were not essentially sensitive to monetary policy interventions, the MPC again renewed its call for urgent complementary fiscal policies to resuscitate production and engineer aggregate consumption.”
The CBN did not leave it at that, they went ahead to outline urgent steps that the Buhari led Federal Government needs to make to complement some of its monetary polices. Here they are.
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Diversify the economy away from oil
“In particular, members underscored the imperatives of diversification of the economy away from oil into agriculture, manufacturing and services.”
Payment of Salaries
“as well as more efforts towards payment of salaries and arrears of public sector employees particularly in states and local governments to stimulate aggregate consumption, as part of the overall fiscal policy menu kit.
Increase Capital Expenditure
On the supply side, efforts must be intensified at increased capital expenditure to redress infrastructural deficits, improve the business environment and spur growth.
Cut Taxes
Consider tax incentives as a stimulus on both supply and demand sides of economic activities
Get the full CBN communique here
My fellow Nigerians.i real wanted to know why some section of Nigerian are calling for cut of taxes,now,by the cbn or some members of the nass.for one the naira is very weak,since the sap,the main reason for the failure of babangida SAP was designed to free the economy based on the idea that the private sector will fill in the empty or vacuum created by the govt,secondly there was a failure by govt to makes sure that the private sector will fill in,through consulting,incentive.e.g taxes cut,which will make the economy competitive
a clear analysis is lack of the usuage this induced knowledge,and lack of the perfection of the human spirit,taxes collection and its usefulness was ignored,and inflation was running out of control and is running today,fiscal means can be used to control and tame inflation,and this is what we are still in today.
If the cbn uses interest rate to control inflation will not work and have not worked,because there is a lot of leakages in the economy,that is why the cbn is always resisting cut in bank interest cut,any time the cbn faces pressures from the presidency,they comply,and inflation raise,they raises bank interest rate.again