The monetary policy of the Central Bank of Nigeria in recent times has continued to focus on achieving price and financial stability for economic gro… - Sarah Alade

The independence of the Central Bank is necessary. The Bank needs the freedom and space to take a long view of what is best for the economy and take decisions accordingly. Central Banks have consistently moved towards policy independence to pursue policies free from political interference. Although no central bank can be entirely independent of government’s influence, it must be free to choose the instruments it needs to achieve its mandate. The Bank must also be free from fiscal dominance; that is a situation where fiscal considerations unduly dictate monetary policy.

Financial illiteracy results in poor financial inclusion. Non-financial inclusion becomes a threat to the survival of the Nigerian financial sector as most adults and young Nigerians are financially excluded from the formal financial sector. A high percentage of adult Nigerians don’t have bank accounts, and this in the long run becomes a big headache for central banking.

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.