CBN GOV. Emefiele Got It WRONG: Suspension Of Foreign Currency Cash Deposits – Akin Awofolaju

CBN GOV. EMEFIELE GOT IT WRONG - Suspension Of Foreign Currency Cash Deposits

Folks,
I have great respect for Gov. Emefiele – the Central Bank Governor and some of us actually supported his appointment but today given all his fire brigade approaches and quick fixes with various unilateral policies bedeviling the struggling Nigeria economy has questioned curious school of macroeconomics minds and this has amounted to waste of Nigeria meager resources and show of professional incompetency.
As an economist, the last straw for me was this unthinkable suspension of foreign currency cash deposits and the retention of Monetary Policy Rate(MPR) to 13% to revamp liquidity in the system whereas, basis of MPR reliance for good economy is sordid not to talk about weak fiscal approach. This approach is detrimental to our economy especially to versed masses who are already in abject poverty, it will raise the cost of living of the verse population
Here are the reasons why the pegging of Monetary Policy Rate (MPR) at 13% rate will do to Nigeria economy:
– It will lead to hyper inflation, much of which we have been witnessed, already happening 1$ exchange rate to Naira is 245 ($1.00 Vs N245) compared to six months ago of N190 to $1
– It will lead to further increase in prices of goods and services in the country i.e Gari and petrol prices etc
– It will affect the real sectors (housing, manufacturing & agricultural etc) as cost of borrowing would remain high and skyrocketing which ultimately detrimental to our bottom line and it can affect the projected growth i.e most of the huge factories are relocating to Ghana, Benin republic and elsewhere……
Fundamentally, one would expect our most revere Gov. Emefiele to understand the economic impacts of his decision that it will affect tremendously the movement of funds from capital market to the money market due to high interest rate.
I’d expect Gov. to understand that lowering the rate will help to reduce cost of funds in the economy than his aggressive approach and choice that will inadvertently accelerate it.

CBN GOV. EMEFIELE GOT IT WRONG – Suspension Of Foreign Currency Cash Deposits

The current Nigeria economy situation will not experience the desire growth without proper funding of the real sectors(manufacturing, Agricultural etc) to boost our export to rejuvenate economic activities….. we had enough reform in 2009 in bank industries besides moderate regulatory and there is no need to put cog in the wheel of economic progress. The retention of MPR at 13% and suspension of foreign deposit without clear strategy lacks economic blueprint and shallow.
The current situation of the economy called for cautions and not unthinkable hasty decisions with doomed reverie.
Read as follows:
Akin Awofolaju, PhD,CLE,CSP,CFE
Development Economist