Freda Okhiria, Abuja
The major macroeconomic objectives of the Federal government includes price stability, poverty reduction, economic growth, equitable distribution of income and wealth, external balance, and full employment.
These objectives are achieved through fiscal and monetary policies, fiscal policies tackle issues such as full employment, economic growth, equitable distribution of income and poverty reduction while the monetary policies address issues like price stability and external balance such as reserves.
However, there is convergence between both objectives, take for example the monetary policy need to ensure price stability before fiscal policy can achieve economic growth, If both authorities don’t work hand in hand to deploy the necessary instruments, they will achieve divergent results. Where the monetary policy is designed to influence the behaviour of the monetary sector the fiscal policy element affects the activities of economic operation in the private and public business domain.
However, the Central Bank Governor, Godwin Emefiele as well as the Finance Minister, Kemi Adeosun in a joint press briefing in Washington DC said they are both working in synergy to ensure the development of the economy, except that both regulators have specific mandate.
However, Mrs Adeosun who spoke through her SA media, Mr Festus Akanbi noted that the Central Bank of Nigeria is an autonomous body with eminent monetary committee members, ”We should not forget that CBN is an autonomous body and it has eminent monetary committee members, they look at the economy from a different angle as professionals, but fiscal authorities look at the economy differently, take for example the minister of finance plays host to members of the private sector almost daily, they come around to present their request from time to time. The both policy regulators meets at National Economic Council, NEC, as such they synergize”. He said.
Defending the ministers’ call for the CBN to reduce the interest rate, he said “When she spoke about low interest rate, the real sector has been complaining and it’s the minister they approach not the CBN Governor, what she was suggesting was that if you have low interest rate it will help local manufacturers in the real sector, also in the 2016 budget there is provision for borrowing, if we have low interest rate it will help the country but in a situation where we have a higher interest rate it means Nigeria will pay more for borrowing, at a time like this when we are in recession and we don’t have money to pay salaries.”
“ They are two different authorities that look at things at different perspective. And more so we are in democracy, unlike military era when the President can command the CBN to fix the interest rate at any point”. He said.