FG Frustrating CBN’s Efforts to Spur Economic Growth

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By Dipo Olowookere

Federal government has been identified as the major cause of the slow economic growth rate in Nigeria despite emerging out of recession in 2017.

According to analysts at United Capital Research, the fiscal authorities are not currently moving at the same pace with the monetary authority, which is the Central Bank of Nigeria (CBN).

In a report published on Wednesday, August 7, 2019, United Capital Research noted that since coming out of recession, Nigeria, the largest economy in Africa, has continued to struggle to record an economic growth rate that is above her population growth.

It said as a result of this, there have been pressures on monetary and fiscal authorities to look for innovative ways to spur economic growth while encouraging foreign inflows (FPIs and FDIs).

“On one hand, since the re-appointment of Godwin Emefiele as the CBN governor in June 2019, the monetary authorities have become more pro-growth in its policies.

“This is buttressed by recent efforts to compel banks to lend to the private sector and discourage their massive investments in government risk-free asset.

“On the other hand, the fiscal authorities are yet to roll out a concrete plan to spur growth amid widening budgeted revenue shortfalls as well as the absence of an executive ministerial cabinet,” the report said.

It added that, “Taking a bed-eye view at the above, it could be seen that the fiscal side is currently not moving at the same wavelength with the monetary authority, bringing to question the ability of the monetary authority alone, to change the present narrative of the nation.”

“In all, we believe for this to happen, the cabinet must be hurriedly formed and coordinated efforts by key economic authorities, including finance, agriculture, petroleum resources, national planning, trade and investment as well as the apex bank, must be set into motion,” the report concluded.

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