The Federal Government has been advised to prioritise the independence of the Central Bank of Nigeria, CBN, while addressing other pressing economic issues in the country.
Ngozi Egbuna, a visiting Professor of Economics at the Nnamdi Azikiwe University, Awka, made the remark in a paper titled, “Primacy of Price Stability: Options for the New CBN Governor” she presented at the Association of Capital Market Academics of Nigeria, ACMAN, Symposium.
She stated: “There is an urgent need to prioritize the CBN’s independence while addressing other pressing economic issues. Nigerians should appreciate that there are lags to policy outcomes – caution and empathy is required at this time.
The new CBN Governor and his team are eminently qualified and experienced to navigate the complicated Nigeria’s economic landscape, and their decisions will shape the nation’s financial future for years to come.
Domestic challenges example insecurity, lack of trust in the administration – election issues, issues of the CBN’s significant lending to government, the conduct of monetary policy in Nigeria, balancing economic stability and growth, stabilizing the Naira in the foreign exchange market, and the backlog of over $10 billion in forex requests should be addressed.”
She noted that the International Monetary Fund (IMF) projected that the global economy will grow at a slower pace of 3% in 2023 from an estimated 3.5% in 2022, adding that it was based on the tightening stance adopted by monetary authorities to fight inflation.
“Sub-Saharan Africa (SSA) is forecast to grow at a slightly slower pace of 3.5% from 3.6% in 2022. On inflation triggers, the growth in money supply increased by almost 40% Year on Year, (y-o-y) to N65.46 trillion in July. Higher Energy prices – Diesel price up by 3.66% to N850/liter (y-o-y), Fuel price up by 15% to N617/liter (y-o-y), while Exchange rate pass through -Exchange rate for Import duty computation adjusted to N770/$ as Naira fell by 42. 9% to N1070/$ (y-o-y)” she added.
Egbuna noted that higher inflation largely reflects the impact of policy changes on food and transportation costs as food inflation jumps by 1.73% to 25.80%, subdued by the effect of the harvest on food prices.