Rising from its last Monetary Policy Committee (MPC) meeting of the year yesterday in Abuja, the Central Bank of Nigeria (CBN) backed the Federal Government’s external borrowing plan.
It also said nothing short of 6 percent annual economic growth will be good enough for Nigeria’s economy.
Briefing journalists at the end of the two-day meeting which retained all key rates again, CBN Governor Godwin Emefiele said borrowing isn’t the challenge but how the funds are spent.
“There is nothing wrong in borrowing but what is very important is how do we deploy the funds being borrowed? I am happy that the specific reasons for these borrowings are targeted at infrastructural development.
“I am sure that you all know that most of the borrowings right now are targeted at roads, rail construction, airports and various other infrastructural development projects that will spur economic activities in the country and ultimately continue to accelerate the growth trajectory of the country,” he stated.
He also said both the fiscal and monetary authorities must work hard to grow Nigeria’s economy by 6 percent annually and consistently too.
“We know it’s a long journey from 1.4 percent to 6 percent but with tenacity, with lots of work being done; with the aggression and focus being shown by the policy makers (monetary, fiscal and trade policy makers), I am very optimistic that we will get there and in a short time,” he assured.
Meanwhile, the MPC voted to retain the MPR at 14.0 per cent; Retain the CRR at 22.5 per cent; Retain the Liquidity Ratio at 30.0 per cent; and Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.
The committee also feels that loosening would worsen the current account balance through increased importation.
The committee expressed belief that key variables have continued to evolve in line with the current stance of macroeconomic policy and should be allowed to fully manifest.
