The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has said the Nigerian economy survived several headwinds and economic turmoil due to the apex bank’s application of homegrown policy measures.
He spoke yesterday at the Bankers’ Committee Meeting held in Lagos.
Emefiele disclosed that while the Nigerian economy has been engulfed with many crisis, just like many other countries of the world, it has been able to relatively withstand the storm and performed far better than many of its pairs, courtesy of CBN’s bespoke and ingenious approach of adopting well thought out and home-grown policy measures to address our macroeconomic challenges.
“Monetary policy has been severely challenged, as its policy space narrowed significantly, in some cases, paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation,” he said.
Speaking on the theme: “Monetary Policy Implementation in a Digitally evolving Developing Economy’, Emefiele said the evolution of Fintechs, cryptocurrencies, digital payments, artificial intelligence and machine learning, have changed the functioning of the financial and banking sectors, both globally and domestically.
“Therefore the urgent call for the need to rethink financial system regulation, supervision and monetary policy implementation. While the innovations come with a lot of risks and uncertainties for the sectors, they also have many benefits for positive economic transformation and particularly, financial inclusion which has been the principal catalyst for inclusive growth, poverty reduction and employment generation,” he said.
He said the CBN championed the financial inclusion principle to achieve the Sustainable Development Goals, including the recent launch of the eNaira to capture the large unbanked populace into the formal sectors and also improve monetary policy efficiency and positive impact on the better standard of living for the population.
“I am aware that global experts and colleague Governors from other central banks would speak to us at this retreat, including the IMF, BIS, Bank of Kenya and private sector players. Members would also share their experiences and thoughts on these emerging issues with the objective of collating some well thought-out and implementable measures to address the impacts of digitilisation on the Nigerian economy,” he said.
Emefiele added that while post-COVID growth recovery in Nigeria can be adjudged to be moderate and stable, we have seen a major change in the key sectoral drivers of that stable growth phenomenon, including the services sector, modernised agriculture, and manufacturing, suggesting that technology and innovation is playing a major role in output growth and economic development in Nigeria. Hence the need to explore new ways of adapting monetary policy tools to improve the contribution of technology and innovations to the growth equation.
Meanwhile, the National Bureau of Statistics (NBS) yesterday announced that the inflation rate rose to 18.60% in June 2022.
The increase is five-year high. Recall that the inflation rate which is also known as the Composite Price Index (CPI) was 11.71% in May and 16.82% in April 2022.
According to the NBS in its “CPI June 2022”,
“In June 2022, the inflation rate increased to 18.60 percent on a year-on-year basis.”
Attributing the rise to the cost of gas, liquid fuel and solid fuel, the report said “the highest increases were recorded in prices of gas, liquid fuel, solid fuel, garments, passenger transport by road, cleaning, repair, and hire of clothing, passenger travel by air.”
The bureau noted that on a month-to-month basis, the food sub-index increased to 2.05% in June 2022, up by 0.03% point from 2.01% recorded in May 2022.
The NBS said 18.60% inflation rate “is 0.84 percent points higher compared to the rate recorded in June 2021, which is 17.75 percent.
“This means that the headline inflation rate increased in the month of June 2022 when compared to the same month in the previous year (i.e., June 2021). Increases were recorded in all COICOP divisions that yielded the Headline index.
“On a month-on-month basis, the Headline inflation rate increased to 1.82 percent in June 2022, this is 0.03 percent higher than the rate recorded in May 2022 (1.78 percent).” The percentage change in the average composite CPI for the twelve months period ending June 2022 over the average of the CPI for the previous twelve months period is 16.54 percent, showing a 0.62 percent increase compared to 15.93 percent recorded in June 2021, said the NBS.
Story By
Collins Nweze, Assistant Business Editor and John Ofikhenua, Abuja