The Monetary Policy Committee has expressed displeasure over the increasing monetisation of oil proceeds, as evident in the growing Federal Account Allocation Committee’s distribution.
The MPC in its first meeting held in 2018, urged the government to initiate strong stabilisation programmes and freeze the growth in its aggregate expenditure and FAAC distributions, in order to create savings needed to stabilise the economy against future oil-price related shocks.
It noted the slow pace of moderation in food inflation and the potential risk of a pass-through from rising global inflation to domestic prices, expressing confidence that the tight stance of monetary policy would continue to complement other policies of government in addressing some of the structural issues underlying the stickiness of food prices.
Relatively, the Governor, Central Bank of Nigeria, Mr. Godwin Emefiele, has also said the country needs strong policy coordination between fiscal and monetary authorities to avoid slipping back into economic
recession.
Emefiele said that the country needed to sustain the recovery from recession with clear-cut policy coordination between key aspects of economic policy-making, noting that such fiscal policies includes, monetary, exchange and trade
policies.
He said, “The first thing we need to do is to remain vigilant. Those of us who have been entrusted with leadership and policy-making responsibilities must neither become complacent nor over-confident,” the CBN governor said.
He said, “We must strive to improve and sustain the same policies that have got us this far. Our import bills may have fallen but out manufacturing and agriculture sectors still have a long way to go, if we may attain self-sufficiency in those sectors.
“We must not be quick to discard the restrictive measures, which aided our recovery, simply because the metrics have improved.
We will remain proactive in ensuring that the
welfare of Nigerians is optimised at any point in time. The bank will continue to provide access to the much needed credit to sectors with the potential to create jobs on a mass
scale.”
