- He noted that the nation must shun the practice of using its exchange rate as basis for its economic policies, adding that more needs to be done on the fiscal side of the economic spectrum.
Governor Godwin Obaseki of Edo State has faulted the current policies of the Central Bank of Nigeria (CBN), saying they will only exacerbate the nation’s economic challenges.
He was particular about the recent jacking up of the interest rate by the apex bank, he noted that such move would stunt the economic growth of the country.
He asserted that small and medium enterprises would be gravely affected by the high interest rates as access to loans would become near impossible for them.
Obaseki made is position on the apex bank’s monetary policies known while speaking at an event organised by the Edo Zone of Bankers’ Committee in Benin City on Saturday.
He said, “Policies that have just been rolled out by the central bank, unfortunately, will not support the growth of our economy.
“Interest rates are already very high, and jacking up interest rates clearly will not allow small borrowers, small businesses to have access to credit at the price to help them grow their businesses. When an economy is in this state, it meets all the push and support.”
The governor stated that the federal government and the leadership of the CBN should promulgate indigenous policies that support and enhance local production and manufacturing that would in turn create job opportunities for youths and transform the country.
He noted that the nation must shun the practice of using its exchange rate as basis for its economic policies, adding that more needs to be done on the fiscal side of the economic spectrum to complete turn around the precarious and disturbing state of the nation.
He said, “I understand the monetary rationale for increasing MPR fundamentally and fiscally, it is not going to lead to growth in our economy. We must focus on the fundamentals which are increasing production, making sure our citizens produce goods and services we consume, and depend less on imports.
“Our economic policy and monetary policy cannot be determined by exchange rate alone, so the issue of increasing cash reserves in the bid to tighten the liquidity is going to be detrimental to our economy.
“I understand the challenge the monetary authorities face, but unfortunately, you cannot clap with one hand. The economy is about fiscal and monetary policies – both must work hand-in-hand and when they don’t as they don’t in Nigeria, there can be a crisis.
“We should focus on fiscal issues so that we can grow our economy out of the challenges we had. We should not panic too much because of foreign exchange. We must focus on how we can do things within our economy, and how we can grow our economy and earn more foreign exchange if foreign exchange is our problem, but I believe creating jobs for young people should be more of a priority for us as people at this time.”
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