From Amechi Ogbonna, Washington DC, USA
Contrary to the perception in some quarters that the Central Bank of Nigeria and its Monetary Policy Committee, are working at variance with the nation’s fiscal authorities on the much desired economic transformation, the Minister of Finance, Mr Kemi Adeosun, at the weekend, said Nigeria’s fiscal and monetary authorities have been working in harmony to pull the country out of its current precarious financial situation.
Adeosun who spoke to Nigerian journalists in the United States of America at a wrap-up session of the 2016 annual meetings of the International Monetary Fund (IMF) and the World Bank, wondered how many Nigerians had misinterpreted the decision of the MPC to retain its benchmark rates of MPR at 14 percent, CRR at 22.5 per cent and Liquidity ratio at 30 per cent as a sign of disagreement with her ministry.
“ I don’t see a disharmony here because what I said was blown out of proportion. I am not a member of the committee and I don’t see what they do. But we are all working together with one objective, which is to get the economy growing. Obviously there would be times of dislocation in any economy, but overtime, things would work together in harmony on a number of fronts,” she said.
The minister said she only expressed her opinion on what she felt would enable her achieve the objective of moving the economy forward, but really had no intension of dictating how MPC would do its job.
Adeosun who as the Finance Minister was head of Nigerian delegation to the annual meetings of the World Bank and the IMF said “when you’re doing expansion, you obviously need low interest rate and that is general economics. If you actually listened to me, I said monetary policy committee is independent, the members of the committee know what they are seeing on the monetary supply side. But, do I still need lower interest rate now, yes! I do. And for as long as I am running a deficit financing, I need low interest rate.”
According to her, that also does not mean that they should lower interest rate at once, stressing there was never a call on my part for the MPC to lower interest rate.
She said “They asked me what I wanted and I said I needed lower interest rates. Remember that I am borrowing externally and internally, so one of the things that we have always said is that we need to come out of the naira and borrow internationally because the rates are now very low to allow that. Many countries even have negative interest rate and so that is an opportunity for us.”
The minister said just because the monetary policy committee finds itself in a situation where its members are looking at their indicators like inflation and money supply among others, they make their decisions based on that and that is always respected.
She promised further closer collaboration with the monetary authorities to ensure that Nigeria pulls through its dire economic predicament.
For his part, CBN governor Godwin Emefiele said there is no disharmony, stressing both the apex bank and the ministry of finance were all poised to see to it the country actually achieve growth in the Nigerian economy. He said “If you read my vision statement just about three days after I assumed office, one of the core issues that I raised at that the conference, was that we would try to pursue a low interest rate regime. We feel that when people are able to access loans at low interest rates, it helps improve growth, reduce unemployment, boost industrial capacity and the rest. Of course, I’m trying to say it is something that eventually we would have to look at, but based on the numbers that the monetary policy committee saw – based on the data that was available – the MPC felt we can pursue growth through another angle.
It has nothing to do with disharmony. I feel it is important for me to also join the minister in restating all that”