Risk management can ease impact of economic recession, CBN explains
The Central Bank of Nigeria (CBN) has given assurances that the risk of loss of revenue arising from significant drop in international oil prices can easily be reduced if the economy is diversified and relationship with oil communities strengthened.
CBN also noted that saving for the ‘’Rainy day’’ would be another effective antidote to the recession.
Deputy Director, Financial Sector Stability of the CBN, Dr. Okwu Nnanna, made the assertions in his keynote address at a “Breakfast Risk Round Table” meeting organised by the Risk Management Association of Nigeria [RIMAN] in Abuja, yesterday.
Speaking on ‘’Challenges of Economic Recession,-Risk Management Perspective’’ Nnanna explained that the high rate of government debt issuance with attendant high interest payment burden, leading to high budget deficit, could also be moderated through effective and robust government policies, especially with the creation of efficiency centres in Ministries, Departments and agencies [MDAs].
‘’The gap between our imports and exports,” he noted, “has led to a wide trade deficit with its attendant pressure on the foreign exchange market and the resulting volatility; these could be mitigated through more prudent management of government revenue and also the introduction of the flexible interbank foreign exchange market with future trading platform.’
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