We Shall Implement Bold Reforms That Make Economy Works- Cardoso
Governor, Central Bank of Nigeria, CBN, Mr. Olawale Cardoso said the apex bank will continue to implement bold reforms that makes the economy works for everyone.
According to Cardoso, the recent measures introduced by the CBN to reform are already bearing fruit.
He said: “The theme, Reforms in the Era of Global Economic Uncertainties: Whither Nigeria, embodies for me the tough challenges and the trade-offs that policymakers worldwide are having to make or are having to navigate in response to the terrible headwinds and economic turbulence we all face.
In this era that has been aptly captured as a vocal era, which is the era of volatility, uncertainty, is characterized by choppiness of the headwinds that are dreaming by the unending stream of shocks in the global and the regional sphere.
This has led to what we tag today as an elevated level of global uncertainty. It is true.
There is an index called the World Uncertainty Index that measures how uncertain the world is today. And the last report of that index says that, and I like the way it summarizes it, so let me read it for you. It says, the shocks that have shaken the global economy in recent years have introduced a new normal for turbulence.
These episodes, the turbulence driven in some cases by political fragmentation between countries, these episodes also lifted uncertainty to exceptionally high levels, which in turn caused economic growth. And I think that’s the part that we are particularly interested in today. The uncertainties that we are seeing globally are having a significant impact on the economic growth and economic outcomes.
On its part, the IMF said recently that we are expecting a growth rate of about 3.2% globally. However, it was true to mention that there are clear risks to the achievement of this economic growth level, and it names those risks as including tight financial conditions, disruptions to global supply chains, geopolitical tension and economic fragmentations.
The economic market, or the financial market tightening that we have seen globally has been as a result of monetary authorities taking steps to rein in inflation. And as the market is tighten, that has had impact on developing the economy like ours because we have seen flights of investment leaving developing economy back to safety as they worry about risk and uncertainties.
Energy and financial markets as well as world trade foods have also been impacted significantly by conflicts especially the crisis in the Middle East and the conflict between Russia and Ukraine which we have seen impacting on trade and other markets. This impact has resulted in a drag on economic growth and has caused significant inflationary pressure.
In addition, we have also seen fragmentation that started during the COVID 19 where governments have resulted more in protectionism to keep more of what they produce to protect themselves.
These kinds of protectionism have created uncertainties in global trade.
Furthermore, the growth in global debt levels especially amongst developing countries that are also struggling to pay or to cover the debt repayment schedule has also created some additional uncertainty in the economic environment.
On the domestic front, we have been faced with uncertainty driven by high inflationary pressure, fx for volatility, rising debt burden and slowing economic growth.
The challenge of high inflation in Nigeria is driven largely by food inflation due to the rising cost of transport of farm produce, infrastructure related constraints, and security challenges of food producing areas and exchange rate pass through to domestic prices from imported goods.
All of these have created uncertainty for businesses and for homes.
Another concern that we face is the volatility in the foreign exchange market which over the years have been driven by market distortions and reduced supply of foreign exchange which have created opportunity for speculative activities that have impacted the price and the rate and the value of the naira.
In addition we’ve had concerns or more or less we’ve prioritized as one of the things that we need to do increasing the capacity of the banking system to be able to facilitate the size of transactions that will help us build and establish the one trillion dollar economy that Mr President has envisioned.
Distinguished ladies and gentlemen having identified some of the challenges versus the abundant human resources which is typified by the great talents and intellectual capacity that I see across the room this morning and the natural resources in our land we certainly deserve better outcomes than the current economic realities that we find ourselves in.
In responding to these uncertainties and indeed to any kind of uncertainties, the need for appropriate focus and unwavering reforms cannot be over emphasized
As the Governor of the Central Bank of Nigeria, I remain committed to reposition the bank to deliver meaningful data-driven and sustainable solutions with clear positive impact on the livelihood of all Nigerians.
However, addressing these challenges requires the concerted effort of all stakeholders, especially the monetary and fiscal authorities working in harmony.
I therefore wish to acknowledge the contribution of Vanguard Newspaper in organizing these very important summits as a platform for collaboration and synergy in the march towards our common goal of a larger and more resilient economy.
When I was being ushered in, I had the opportunity to greet the publisher and his adorable wife and I was want to whisper to them a big thank you for putting this together because we hope that at the end of this summit, we’ll be able to harvest many new and germane ideas that we would mix with available data to move our country forward.
Like you all know, we are always on the lookout for new ideas, for new collaboration, for new ways to add value to our economy, and to build our economy and make it work for all of us.
On our part, my team and I in the Central Bank of Nigeria are determined to continue to implement bold reforms to make the economy work for all Nigerians
