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HomeTop NewsCBN Acting Gov, Shonubi asks Tinubu to tackle insecurity, low revenue

CBN Acting Gov, Shonubi asks Tinubu to tackle insecurity, low revenue

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…Says securitisation of N23.7 trln Ways & Means to provide revenue respite

By Oludare Mayowa

The acting Central Bank of Nigeria (CBN) Governor, Folashodun Shonubi has said that the approval by the ninth National Assembly for the securitization of the overdraft borrowing from the Bank will provide some immediate funding respite for the government.

He also tasked President Bola Tinubu with the need to address “the general insecurity and low revenue challenges” to ensure growth in the economy.

Before the expiry of the tenure of former president Mohammadu Buhari, the parliament approved the request of the government to securitize the N23.7 trillion outstanding Ways and Means exposure to the CBN.

Shonubi, in his personal note at the last Monetary Policy Committee (MPC) meeting, expressed the need for the government to actively implement initiatives that will address impediments to real sector activities and aid growth.

According to him, “The fiscal sector is characterised by low revenue, high deficit, and huge debt, thus limiting the capacity of the government to respond to, and fully support monetary policy.”

He said; “Clearly, the fiscal authority has a major role to play to promote growth and curb inflation.

“Hence, the recent decision to securitize outstanding “Ways and Means” is expected to provide some immediate funding respite.

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“In the same vein, state governments need to do more to attract and encourage investment that will improve the fortunes of states, especially as easy-to-get resources continue to dwindle.”

Shonubi noted that every economy must contend with the delicate task of balancing actions to turnaround the trajectory of inflation, with the imperative of ensuring the wheel of growth is kept running, while also tracking the financial system stability implications of the tight policy environment.

According to him, despite the resolute actions the CBN has taken in the last one year, the major challenge for domestic monetary policy remains high inflation, which is still at a level that is considered detrimental to investment and the overall fortune of the economy.

For instance, despite the optimism that followed the new security arrangement in oil-producing areas, the dismal performance of the oil sector has been a major drag on growth.

He charged President Bola Tinubu’s administration to act to eliminate the encumbrances in the oil sector while addressing the general insecurity and low revenue challenges.

“Again, as stated in previous statements, the government should revisit the adoption of Public Private Partnership (PPP) to eradicate leakages and wastages in various aspects of our social and economic affairs.

“For monetary policy, the immediate and short-term realities require that we must maintain a tight policy stance to sustain and consolidate recent gains while ensuring that we do not stifle real sector activities,” Shonubi said.

(omayowa@globalfinancialdigest.com; Newsroom: +234 8033 964 138

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