The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has said that the reduction in foreign reserves from $47 billion to about $40 billion was not an issue to worry about, as the apex bank was making the right investments with it.
This comes as the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) retained the Monetary Policy Rate at 13.5%.
Emefiele, at a post-MPC briefing, explained that the committee unanimously voted to retain the MPR after the rates were reduced from 14 percent to 13.5 percent in March 2019, the first time the MPR was reduced since July 2016.
On the impact on domestic food prices of the recent closure of Nigeria’s land borders, the CBN Governor said that the committee noted that any upward price movement arising from the closure was reactionary and therefore temporary.
“Moreover, significant investment has been made over the last three years to sustainably increase domestic food supply.
It noted some of the key initiatives in this direction to include: the Commodity Development Initiatives, designed to finance the agricultural value chain of ten 10 commodities namely cassava, cocoa, cotton, rice, tomato, poultry, livestock and dairy, fish, oil palm and maize, which has received N171.66 billion in funding,” Emefiele explained.
“Four of these crops received over N140.12 billion or 81.6 percent of total disbursements (Cassava, N11.44 billion; Cotton, N40.47 billion; Rice, N53.40 billion; Oil Palm, N34.81 billion). It is, therefore, expected that the outcome of these interventions will close the supply gaps already envisaged in the medium to long term, including dampening domestic prices.
It thus expressed support for the temporal closure of Nigeria’s land borders, noting that securing the country’s land borders should be further enhanced.
On the impact of the bank’s recent policy on loan-to-deposit ratio, Emefiele said an increase in absolute gross credit, amounting to N1,169.70 billion, was recorded between end-May and end-October 2019.
“Consequently, the manufacturing sector received N459.69 billion, the highest in two decades. This was followed by Consumer Loans of N356.65 billion, General Commerce (N142.98 billion), Information and Communications (N82.07 billion), Construction (N74.52 billion), Agriculture, Forestry and Fishing (N73.20 billion), Mining and Quarrying (N3.64 billion) and Transportation and Storage (N3.09 billion), amongst others. The committee, therefore, urged the management of the bank to sustain its current efforts to improve lending to the private sector and to explore other initiatives to provide funding to other critical sectors of the Nigerian economy.”