Stakeholders want humane policy, fund flow for economic development
The Head of Research at FSDH Merchant Bank Limited, Ayodele Akinwunmi, said given the economic situation and the decision, CBN may continue to use sale of government securities to influence yields and rates in the money market, which is adjudged costly.
“It is clear that the CBN wants more credit to flow through the real sector of the economy in the form of credits to stimulate growth. We see the CBN adopting policy to release more fund to the real sector.
“However, more complementary policies are required to reduce the level of risk in the economy to enable banks lend more money to the real sector, with efforts to reduce non-performing loans,” he said.
An economist, Bismarck Rewane, said several things had worked against the economy within these periods, including the usual seasonal challenge, electioneering, and the lack of catalysts to boost growth drive, particularly the disharmony between monetary and fiscal policies that fostered investment uncertainties.
“We need investments to move on. Of course, there are signs, but what we need more now is not the signs, but tangibles. In the near term, everything will continue this way, unless something else happens,” he said.
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, said the private sector was not surprised by fact that the parameters of the monetary policy did not change.
“For us in the business community, we appreciate the fact that the CBN is looking at better financial intermediation. The treasury bills and other instruments are crowding out funding against the private sector.
“Although the CBN is trying to discourage investing funds in certain long term instruments, we are hopeful of a policy to see the limit placed on how much banks can invest in government securities.
“We understand efforts of the CBN are geared at promoting diversification of the economy, but that cannot be done alone, hence the need for proper coordination and collaboration with key stakeholders.
“Funding alone cannot solve the problems of the real sector as there are other challenges. Unless there is a proper coordination of efforts, the key agencies cannot do it single-handedly,” he said.
On his part, the Managing Director, Cowry Asset Management Limited, Johnson Chukwu, said the slowdown in the gross domestic product (GDP), is discouraging, given that the population has continued to grow at three per cent, thereby creating more challenge for the economy.
“Government should come up with policies that will stimulate growth, particularly, with the fiscal policy. It is unfortunate that the 2019 budget has not been passed up till now.
“The energy crisis is still ongoing. The agriculture sector needs to be scaled up to make meaningful contribution. There is need for private sector partnership because government lacks the financial capacity, coupled with the huge debt overhang. The transparency issues are still there. Indeed, the economy needs action now,” he said.
As the current regime winds down with the valedictory meeting yesterday, expectations are high that many of the issues raised will be taken up under the new administration with a view to fast-tracking economic development in a harmonious and friendlier environment.