The future of the Nigerian economy is very bright. The Economic Growth and Recovery Plan (ERRP) by the Federal Government with other complementary po… - Sarah Alade

In 2016, the Nigerian economy officially entered into recession, recording two consecutive quarters of negative GDP growth rates of 0.36 per cent and 2.06 per cent in the first and second quarters, respectively. For the full year of 2016, the real GDP contracted by 1.51 per cent. Achieving price stability has remained the priority objective of most central banks. However, given the high level of poverty and unemployment in most developing countries, it has become imperative for central banks to work hard at achieving price stability with growth.

It is also expected that the fiscal authorities would provide direction and leadership while the monetary authorities would facilitate an enabling business environment conducive for growth. Nonetheless, the overriding mandate of the Bank continues to be price stability across the major price rates: inflation; loan interest; and foreign exchange. Stability in prices is essential for investment and consumption. Monetary policy can help through influencing short-term interest rate, but monetary policy alone is not enough to pull the country out of recession. Fiscal policy must come in and do its part to fully pull the economy out of recession.

The threat to CBN autonomy is also disturbing. Global best practice prescribes central banks’ independence to enhance policy coherence and sturdiness born out of freedom of vision and implementation space.