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By Chinwendu Obienyi
Nigeria must urgently transition to a growth model anchored on domestic productivity rather than volatile capital inflows if recent macroeconomic gains are to be sustained, a member of the Monetary Policy Committee (MPC), Bandele Amoo has said.
Amoo noted that while Nigeria’s economic indicators are showing encouraging improvement, long-term stability will depend on the strength of local production, institutional credibility and export diversification.
According to him, recent reforms have begun to restore investor confidence, with headline inflation moderating, foreign exchange reserves recovering and external liquidity conditions gradually improving.
These developments, he said, signal a turning point in the country’s macroeconomic trajectory following years of instability.
“Nigeria stands at an important juncture today as fundamental macroeconomic indices continue to improve: policy reforms have begun to restore investor trust, general consumer prices are declining, non-oil export basket and procedure is improving, reserves are recovering, and external liquidity conditions are gradually improving.
So far, the durability of these gains depends on whether the economy can transit away from random inflows toward a foundation built on economic productivity, institutional credibility, and export diversification”, he stated.
Amoo noted that achieving this structural shift would transform the nation’s external reserves from a fragile buffer into a strategic asset capable of supporting macroeconomic stability, long-term growth and economic resilience.
Commenting on recent monetary policy decisions, the MPC member said the decision to retain the 45 per cent Cash Reserve Requirement (CRR) for deposit money banks was deliberate and supportive of productive lending.
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According to him, maintaining the CRR at 45 per cent provides banks with the operational flexibility needed to adapt to prevailing liquidity conditions while gradually re-orienting their portfolios toward real-sector financing.
He explained that the policy framework is designed to discourage idle liquidity and speculative trading, while incentivising banks to channel credit into sectors with strong output, employment and export potential.
Amoo further stated that the continued application of the 75 per cent CRR on non-Treasury Single Account (non-TSA) public sector deposits remains critical for sterilising excess liquidity at its source, particularly liquidity arising from Federation Account Allocation Committee (FAAC) inflows.
He stressed that monetary policy must remain firm and forward-looking, especially as the 2026 budget cycle approaches and election-related spending pressures loom ahead of the 2027 general elections.
According to him, sustaining dis-inflation, exchange-rate stability and growth momentum will require tight coordination between monetary discipline and productivity-enhancing reforms across the economy.
The broader implication is that the country’s current recovery phase represents more than a cyclical rebound, it offers a window of opportunity for structural transformation.
Sustaining momentum will require disciplined macroeconomic management, continued reform credibility, and deliberate efforts to deepen value-added production across key sectors.
As Nigeria navigates this pivotal moment, the emphasis is increasingly shifting from short-term inflow management to building a durable economic foundation capable of delivering stability, resilience and inclusive growth over the long term.
