The governor of the central bank of Nigeria, CBN, Olayemi Cardoso, on Thursday disclosed that the institution will pull back from direct development finance interventions.
In a statement released on Thursday, Cardoso said the CBN needs to return to its core functions of monetary policies and advisory roles to support economic growth.
According to the head of the apex bank, under previous leadership, the CBN had included fiscal intervention in its functions.
This, Cardoso said, blurred the lines between monetary and fiscal environments.
“In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth,” he said.
Cardoso said the CBN’s advisory roles could include acting as a catalyst to promote specialised institutions and financial products that support emerging sectors of the economy.
He said new regulatory frameworks will be facilitated to unlock dormant capital in land and property holdings, as well as increase access to consumer credit and expand financial inclusion to the poor.
Part of the activities of the CBN, according to Cardoso, will include increasing private sector investment in housing, textiles and clothing, food supply chain, healthcare, and educational supplies by de-risking instrumentation.
“These verticals have huge demand patterns, with the potential for high local inputs and value retention, and can be the basis for rapid industrialisation,” he said.
Cardoso said CBN will use its convening power to foster partnerships between key multilateral and international stakeholders in government and private sector initiatives.
The CBN governor said the problems confronting the central bank are large and complex and can not be solved by the new management overnight.
“It must be emphasised that CBN does not have a magic wand that can be waved at the current economic challenges,” he said.
The CBN governor added that “with focused leadership and sustained reforms, it is expected that over time, the country will see gains in open economic spaces, attract new investments, create employment, and give our hardworking and talented compatriots opportunity for a more prosperous future”.
Highlighting some of the challenges faced by the apex bank, he listed failure in corporate governance, diminished institutional autonomy and the need to refocus CBN back to core functions.
Cardoso also said the CBN is facing the problem of discontinuing unorthodox monetary policies and foreign currency management.
He said the CBN is looking into the backlog of forex demand, examining creative financing options for clearing the short to medium-term backlog and ensuring inflation and price stability.
Cardoso said the financial regulator is considering control options to enforce statutory limits in the use of ways and means for financing public sector deficit.
