Saturday, January 25, 2020 / 09.00AM /
Ottoabasi Abasiekong for WebTV / Header Image Credit: cbn.gov.ng
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria at the end of its first meeting for the year 2020 called on the Federal Government to improve security across the country especially within the agricultural states and address the nation's infrastructure deficit.
The recommendations were part of the suggestions of the CBN Governor, Mr. Godwin Emefiele, on behalf of the MPC at a press briefing in Abuja.
Members of CBN's MPC believed that security in the agro belts of the nation would improve food production and address the herder-farmer clashes that are factors causing a rise in inflation.
The MPC also called for robust steps to address the infrastructure deficit in the country, the resolution of which would stimulate economic growth.
Mr. Emefiele said the Monetary Policy Committee observed that rising inflation relates to structural and supply chain issues.
The MPC observed that the Nigerian domestic economic growth was improving but at a slow pace.
The CBN Governor commended the Federal Government for signing the Finance Bill but called for a strategic drive to reduce reliance on crude oil receipts, making a strong case for tax reforms that will improve revenue.
Emefiele reiterated the need for the Federal Government to explore building fiscal buffers to enable the nation to respond to external shocks.
The MPC voted 9 to 2 members in favour of raising the Cash Reserve Ratio from 22.5% to 27.5%.
It retained the Monetary Policy Rate at 13.5% alongside other parameters, namely; Liquidity ratio 30% and Asymmetrical Corridor +200 and -500 basis points.
The move to raise the Cash Reserve Ratio, Emefiele said, was part of the drive to improve lending to the real sector of the economy.
On the outlook for the Nigerian economy the MPC highlighted the following as downside risks to watch in 2020;