The new governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has disclosed that he will need to abandon some of the policies of his predecessor, Godwin Emefiele, and focus solely on monetary policy to strengthen the naira.
Cardoso stated this during his screening and confirmation at the Nigerian Senate as the CBN governor yesterday.
The red chambers also screened and confirmed his deputies at the apex bank.
They are Emem Usoro, Abdullahi Dattijo, Bala Bello and Philip Ikeazor.
While answering questions from the lawmakers, Cardoso said the CBN bank faces numerous challenges, which his team had identified and would address.
His words:
“We have identified issues of corporate governance, diminished institutional autonomy, discontinuity of orthodox policies and foreign currency issues.
“Addressing inflation and price stability is the function of the CBN. We will address the issue of foreign exchange unification. If there is a need for interest rate alignment, we will do it for economic growth.”
To manage the economic policy, Cardoso said size matters, adding that the CBN team had identified macroeconomic indices and will facilitate new ways to attain $ 1 trillion GDP in eight years.
On inflation, Cardoso said each will be tackled based on their causes.
“If the inflation is on food, we should ramp up production of food. If inflation is on energy, we know the challenges of energy. If you are importing, automatically you are importing inflation,” he said.
On the issue of money supply, the former Citi Bank chairman said the way money has gone up in Nigeria, “that, itself, is behind inflation. It is a problem. It is a big problem, but going forward, we will do everything possible to ensure that deficit financing does not bring problems to us.”
He added:
“These are the assurances I can give you coming from outside because we will maintain a good working relationship to block the excesses we had in the past.
“I believe that the CBN under us will have no choice but to embrace a culture of compliance.
“We will not wait for oversight before we interact with the lawmakers. We will have zero tolerance to abuse of processes. We recognise the fact that we need to work closely with these chambers at the National Assembly to ensure compliance.”
According to him, deficit financing and undue money glut are responsible for 50 per cent of the inflation.
He told the Senate there is a need to stabilise the naira to settle Nigeria’s outstanding debts, stating that the country is only spending money on printing currency rather than bringing in revenues.
According to him, the immediate thing to look out for is to address operational issues, which are the unsettled obligations of the CBN wealth of N4 billion or N7 billion.
He opined that Nigeria will only progress if it can handle that side of the foreign exchange rate.
Cardoso said the issue of the foreign exchange rate is worrisome, adding that Nigeria must have a stable exchange rate.
