In an editorial report in the leadership newspaper, it was raised that the Communiqué Number 99 issued by the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) captures its sense of satisfaction with the state of the Nigerian economy. The position was based on a reading of the domestic and foreign environments, as well as earlier counter measures it had launched to contain threats to the economy. At one of its meetings, the MPC identified some of the red flags for the economy as the fall in oil prices, ‘tepid’ recovery of the global economy and the diminishing flow of foreign direct investment. Yet it went ahead to offer Nigerians assurances of a situation under control.
Patriotic as these assurances may be, such optimism is not shared by many Nigerians, who expect more from the body. The suspicion that the MPC is deliberately not saying all that needs to be said or is misreading the signals is strong. And that would be a disservice to the nation.
For instance, the uncommon gravity of the current oil market induced crisis the country is facing translates into, among other implications, a drop in foreign exchange earnings with consequent adverse effects on its import dependent economy. In only one year, between December 2013 and the end of 2014, external reserves plummeted by 20% from $42.88billion to $34.25billion and they are expected to yet drop further. The combined effect of the synchronised haemorrhage of the economy’s lifeblood through these two dispensations is already telling on the citizenry, as the CBN has commenced the rationing of forex in the official market. This is just as devaluation of the naira has also commenced with an initial eight per cent drop in value, and the possibility of more of such interventions cannot be ruled out. Meanwhile, it is feared that little or no help may come from the international community immediately. The slow growth of the global economy, especially with the associated retrenchment of investment portfolios due to risk aversion by investors worldwide has not been helpful. In fact, the stem of the flow of foreign direct investment into the economy has also deepened Nigerians’ level of concern.
With its back against the wall, hope for Nigeria’s economy lies in re-growing it towards sustainable self-sufficiency. And this has to be done by the country pulling itself out of the morass by its bootstraps, ostensibly with the active involvement of the MPC.
While the right of the MPC to be optimistic about the dividends of its responses the economy is experiencinag cannot be denied it, carrying the citizenry along remains sacrosanct. In pursuing monetary policy stability, the CBN had in previous situations launched several initiatives, including the establishment of special monetary vehicles to provide a conducive operating environment for economic actors. The present situation calls for more of such initiatives that will not only be seen to exist, but that will also be accessible for Nigerians to benefit from in the times ahead.
Photo Credit: Premium Times
Credit: Leadership Newspaper