Guys, mind the way you spend money from now on oh...our
economy is entering a critical phase...
The Monetary Policy Committee of the Central
Bank of Nigeria has warned Nigerians to brace for a longer period of low
revenue from oil sources, which would necessitate hard and uncomfortable
choices.
The committee, at the end of its first meeting
for 2016 in Abuja, observed that while the period of low oil prices, which
started in 2005, lasted for a maximum of eight months, the current situation
was expected to continue over a longer period of time.
The CBN Governor. Mr. Godwin Emefiele, further
disclosed that
the development would necessitate huge sacrifices
from Nigerians. Crude oil prices had declined from a peak of $114 barrel
in July 2014 to $30.25 per barrel on Tuesday, January 26, 2016.
The CBN governor
said since oil prices is on a steady decline, certain trade-offs would have to
be envisaged and accommodated.
He
said, “Consequently, it is imperative to brace for a longer period of low
government revenues from oil sources, which would necessitate hard and
uncomfortable choices as the economy transits to more sustainable sources of
revenue, consistent with the economic realities and strategic objectives of the
country. In the circumstance, certain trade-offs must be envisaged and duly
accommodated.”
He added, “Consequently, the bank is fine-tuning the framework for foreign
exchange management with a view to ensuring a more effective and liquid foreign
exchange market, taking into account Nigeria’s strategic development
priorities, with the policies being designed within an environment of regularly
ensuring consistency with monetary and fiscal policies.”
He continued, “To this end, the committee once again urged the Deposit Money
Banks to improve lending to the real sector as part of their patriotic
obligations to the country, and enjoined the management of the central bank to
continue to explore ways of incentivising lending to employment and growth-generating
sectors, particularly the SMEs.”
Asked if CBN would consider forcing the banks to lend to the real sector,
Emefiele stated that inasmuch as it would prefer that the DMBs should increase
lending to the real sector, it would be practically impossible to force them to
do so due to the fact that the banks were established to make profit.
Emefiele further revealed that, “We don’t have any immediate plan to devalue
the naira. However, we are already working on different scenarios; the models
are being worked on.”
On the introduction of the N50 stamp duty charge, Emefiele explained that the
decision was taken to support the Muhammadu Buhari government in its bid to
generate more revenue due to the drop in oil prices, and build some very
important infrastructures that would be beneficial to all Nigerians.
