Central Bank of Nigeria’s Governor, Mr. Godwin Emefiele, yesterday explained that the cordial relationship between the central bank and fiscal authorities has not in any way weakened the independence of the Bank.
Emefiele, who said this in an interview monitored on AriseTV, also allayed concerns of inflationary pressure, with the recent uptick in the consumer price index (CPI), which rose to 11.6 per cent in October.
In addition, the Governor reiterated his support for the decision of the federal government to close all the country’s land borders, saying it would help in stimulating domestic production.
Responding to a question on the independence of the central bank, Emefiele said: “Let me assure everyone that the independence of the CBN as enshrined in the CBN Act of 2007 (as amended), is intact. At the same time, we have a responsibility as a monetary policy arm of government to support economic growth and development.”
He added: “The central bank is an entity within the larger entity called Nigeria. So, when you talk about interference, by virtue of the fact that the central bank is putting in place policies that would help to engender growth, policies that would help to create jobs, there is no conflict in that and in fact, it has nothing to do with the independence of the CBN.
“The independence of the CBN is enshrined in the amended CBN Act of 2007, and nothing is altering or in any way, affecting the independence of the CBN.
“When you say your mandate as CBN is price and monetary stability, it must be price and monetary stability that is conducive to growth, conducive to creating jobs and conducive to ensuring that industries remain alive, whereas the primacy of your mandate, which is price and monetary stability remains in tack.”
According to Emefiele, “Whether you are a president or a CBN Governor, you have been placed in a position by God to serve your people and put in place policies that would enhance the lives of your people.
“So, if by that you feel that the central bank is moving out of its realm, I don’t agree with you. What is important is that we have a country and an economy that must grow, and an economy where its people must be seen to live well and that is what we are doing and it has nothing to do with any conflict or intervention.”
He described inflation as a cankerworm that policy makers must fight, saying that high inflation erodes purchasing power and affects people’s ability to live well.
“I can tell you that the primary mandate of the CBN is to put in place policies that would control inflation. And that we would do. We are not going to put the blame on the control of inflation on anybody. If the politician likes, because he is an actor, let him do whatever he likes.
“But, we would do what we need to do to make it impossible for him to take certain actions that would affect the level of prices in the country. That is our job and we would do it,” he said.
Commenting on the latest inflation figures, he noted that he had read some reports where the trend was attributed to the border closure, “and I laughed.”
“If inflation is up as a result of border closure, it means that as a result of the border closure, supply of certain basic items have gone down, while demand has either risen or has been flat. So demand has outstripped supply and by that you are facing a demand-pull inflation. And I have to speak now as a Nigeria. If prices of goods have gone up because we closed the borders so that jobs can be created for our people, so that our industries can come back alive again, and prices have up by 0.3 basis points in one month, for me I am not going to lose sleep.
“All we need to do is for us to work hard to boost supply, so that prices can come down because supply has gone up to be able to match demand. I don’t have any apology to people who feel the border closure has resulted to price increase.
“The reason is because it is creating jobs. Is it rice? Is it tomatoes or poultry? Do you know eggs were being smuggled into this country? Tomatoes were being smuggled into this country?
“So, what are we producing if we could smuggle eggs into this country? All these were killing domestic industries and making people lose their jobs.
“So, you talked inflation going up, those prices would moderate. I am so certain that they would moderate because efforts are being made to boost supply.
“I granted an interview recently at Benin, where I said the borders should be kept closed even for two years or whatever is to be done to prevent dumping and smuggling, and see what would happen to Boko Haram, kidnapping and this country will blossom.”
He said that the federal government has taken measures to improve Ease of Doing Business in the country and expressed optimism that measures being taken would address challenges such as poor power supply and other infrastructural challenges being faced by businesses.
Emefiele also assured bank customers that the central bank would continue to protect them against excessive bank charges.
