- Denies devaluing naira
From Uche Usim, Abuja
As Nigeria battles several economic headwinds, including rising consumer prices, high public debt and its servicing costs, dwindling fiscal revenues, and weak economic recovery, the Central Bank of Nigeria (CBN) says it is fashioning out quasi-fiscal measures to support the federal government’s effort to manage the general economy.
The apex bank also denied devaluing the naira from N461/$1 to N631/$1 as reported by a national daily (not Daily Sun).
It also said it was aggressively addressing liquidity challenges in the face of emerging global and domestic growth and ensuring people-oriented programmes percolate to all nooks and crannies of that country.
Dr. Hassan Mahmud Director, Monetary Policy Department made the disclosure at the 2022 Fiscal Liquidity Assessment Committee (FLAC) retreat themed: Post- Pandemic Fiscal Stress and Monetary Policy Management in the Digital Age.
He said the Fiscal Liquidity Assessment Committee (FLAC), established in 2007, remains a strategic Committee of the Central Bank of Nigeria (CBN), which provides an avenue for monetary and fiscal authorities to interact, for the purpose of articulating policy decisions that are complementary and avoid conflicting signals.
“It is an important platform for sharing critical information towards effective coordination between fiscal and monetary policies, with the aim of achieving the overall macroeconomic objectives of the government.
It has become imperative to bring together all agencies of FLAC to ensure a continuous evaluation of their activities, and provide strategic responses to issues”, he said.
He added that the current challenges require innovative and strategic responses to address them.
Mahmoud noted that there was a need for a reappraisal of the prevailing macroeconomic policy mix and its effectiveness within the context of emerging digital transformation.
“The country’s fiscal stress has been stoked by global COVID-19 pandemic and its associated lockdown measures, unhealthy developments in the nation’s oil industry, declining national revenue, among others. The government’s response to these headwinds led to substantial budgetary allocations to boost economic activity and provide social safety nets, resulting in significant increases in public debt and its service costs. In addition, the wide-spread adoption of electronic modes of payment has further impacted monetary policy management in the Central Bank’s efforts to ensure price and financial system stability. These developments call for a comprehensive fiscal consolidation effort to boost revenue mobilization and strengthen the efficiency of public expenditures. It has also become imperative that fiscal and monetary authorities should intensify ongoing collaborative efforts and provide assurances that envisaged macroeconomic objectives are achievable under the present conditions”, he explained.
Earlier in his remarks, Deputy Governor, Economic Policy Directorate of the CBN, Dr Kingsley Obiora while debunking the naira devaluation report, said the apex bank would continue to marshal out policies that would revamp the economy.
“I worked hard this morning to put out a fire that there has been a shift in exchange rate as erroneously reported. It’s not true”.
His comments were buttressed by the CBN Spokesman, Dr Isa AbdulMumin, who described the naira devaluation story as fake.
He said: “We wish to state categorically that this news report, which in the imagination of the newspaper is exclusive, is replete with outright falsehoods and destabilizing innuendos, reflecting potentially willful ignorance of the said medium as to the workings of the Nigerian Foreign Exchange Market.
“For the avoidance of doubt, the exchange rate at the Investors’ & Exporters’ (I&E) window traded this morning (June 1, 2023) at N465/US$1 and has been stable around this rate for a while.
“The public is hereby advised to ignore the news report by Daily Trust in its entirety, as it is speculative and calculated at causing panic in the market.
“Media practitioners are advised to verify their facts from the Central Bank of Nigeria before publishing in order not to misinform the public”, he said.
Also speaking, the Permanent Secretary, Ministry of Finance Budget and National Planning, Aliyu Ahmed, said that the fiscal wing of the economy has implemented far-reaching expenditure measures to contain the adverse impact of the pandemic on the citizens, particularly the poor and vulnerable, as well as to resuscitate the economy.
“The fiscal arm of government also pays close attention to the thriving fintech sector to boost tax collection, aid targeted social interventions, improve debt management, and facilitate international trade, amongst others”, he said.