The Governor, Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has announced N1billion bankers charitable endowment fund, stressing that the charitable endowment fund will fund a major charitable initiative every year starting in 2020.
Emefiele while unveiling the bank’s plans for the next year at a the keynote address titled: “Strong Sustainable growth for the Nigerian Economy” at the 54th Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos on Friday, highlighted priorities for 2020 that include support for greater economic growth, price stability and low inflation.
According to him, the Bankers’ Charitable Endowment will directly fund strategic social programmes in states and local communities across Nigeria. He expressed the hope that the Fund would spur a trend across other industries and sectors to collaborate and work together to better the lives of all Nigerians.
Speaking on the developments in the country’s economic and financial sector, over the past year, and how they affect the macro-economic outlook for 2020, he said in spite of the positive growth the economy experienced, growth had remained slow due to “some structural constraints” in the economy.
According to him, the pace of growth, given Nigeria’s growing population, exposed the economy to shocks, such as changes in the oil price, and sentiments in the global financial markets.
Disclosing plans by the CBN to support the economic recovery and enable stronger growth for the country’s Gross Domestic Product (GDP), Emefiele said that the Bank would continue its current tight stance, particularly in view of rising inflation expectations.
“Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, the CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilization,” he explained.
Speaking further, he said the Nigerian financial system was now stronger due to the fact that capital buffers and liquidity in the banking system have continued to improve.
He equally disclosed that credit conditions in the banking system had improved supported by the CBN’s new policy measures announced in June 2019, which require banks to maintain a minimum 65 percent loan to deposit ratio. Furthermore, he said banks in the country are now able to recover delinquent loans from customers’ accounts in other banks, adding that the measures now placed Nigerian banks in a much better position towards supporting a stronger economic recovery. This, he added, had increased gross credit by N1.16 trillion between May and October 2019.
The Governor also highlighted the Bank’s effort in development financing, which he said the CBN had sustained in order to help support growth in critical sectors of the economy such as agriculture and the manufacturing sectors, through programmes such as the Anchor Borrowers’ Programme, the Commercial Agriculture Credit Scheme and the Bankers Committee Agri-Business/Small and Medium Enterprises Investment Scheme(AGSMEIS).
Alluding to the economic face-off between some countries, as well as the likely challenges the economy could face due to moderate oil prices, he stressed the need for Nigeria to build up the necessary buffers that would protect the economy from pressures in the global market. He then restated the need to boost local production and diversify the country’s export base.
“We should encourage Nigerians to consume goods that can be produced in Nigeria, knowing full well that a time will come when we may not have the foreign exchange to aid such activities, if we continue to rely on earnings from the export of crude oil,” he emphasized.
The Governor urged all stakeholders to believe in Nigeria’s greatness, stressing that the country was blessed with abundant human and natural resources, which if truly harnessed would propel Nigeria into one of the world’s top 20 economies.
“We must redouble our efforts to continue to support actions by the monetary and fiscal authorities to diversify the base of the Nigerian economy through encouragement of made in Nigeria products.
“We must also consume what we produce and produce what we consume. We must discourage the propensity to import what can be produced in Nigeria. This is because if we do not reduce import, the same imports will kill us knowing full well that such activities do not aid our efforts to create jobs and support the growth of our local industries.
“If we choose to follow the trend of supporting imports of goods that can be produced in Nigeria, we will lose jobs, our industries will die and insecurity and other social vices in our land will continue to increase. We must choose this alternative path of improving domestic production, which will support growth of our local economy,” he charged.
As part of the Bank’s priorities for 2020, he said the CBN was determined to maintain its stable exchange policy stance in the near to medium term given the relatively high level of reserves. He said the Bank would also sustain these efforts in 2020 as part of our plan to reduce our financial exclusion rate to under 20 per cent over the next year.