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CBN wants Nigeria to boost revenue as part of measures to deal with economic challenges

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The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele has asked Nigeria and the rest of the African countries to increase revenue generation as part of measures of dealing with the prevailing global economic challenges.

Emefiele, who spoke on the sideline of the ongoing World Bank/IMF Spring Meetings in Washington, DC, said while the global financial watchdog is recommending slow down in spending, he would prefer that the country boost revenue to cover up the fiscal deficits.

“For the fiscal, of course, because of the limited fiscal space, the IMF insists that countries need to reduce their spending, but in my case, I will say, well, if you want to spend, then raise revenue to be able to spend.

“I think it’s important that you must raise revenue and not get yourself constrained in an environment where there is no debt, where financial market conditions are very tight and very limited, where interest rates are high and could create a lot of burden for economies, and the only option for fiscal policy, in this case, is to expand the revenue base so as to be able to spend.”

He also spoke on the growth projection by the IMF for Nigeria, noting that the economic outlook for the country as forecasted by the BrethonWood institution is an indication that the country and the economic managers are doing something right.

The IMF,  in its Regional Economic Outlook, projected that Nigeria would record 3.2 percent growth in its gross domestic product (GDP) for the 2023 fiscal year.

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Emefiele, while addressing journalists at the venue of the meeting, said even though the growth projection of 3.2 percent is still sub-optimal by CBN’s assessment, he, however, noted that the IMF’s decision to keep Nigeria’s growth projection at such a level is delightful.

“I must say that we are delighted that even in sub-Saharan Africa, the growth levels in Nigeria, even by our assessment, are still sub-optimal. That the IMF would, among all the countries in Africa, say that growth in Nigeria should be retained at 3.2 percent, gladdens our heart,” Emefiele said.

He further said that “It means we are doing certain things that are correct, and we’ll continue to do those things that are right.

“But it also means that we are not going to remove our eyes from monetary policy, which is to focus extensively on how to moderate inflation, but at the same time, ensure that banking system stability remains resilient and then strong, as it is right now.”

“The IMF themselves also talked about the fact that even the debt portfolios, the lending portfolios, have reached [an] all-time high. In two decades, this is the highest level of debt portfolio that the IMF has seen in its books,” Emefiele said.

“They are, unfortunately, warning that they may not be in a position to do much for countries that really require more debt to be able to restructure the balance sheet and then keep going on.”

“So, the focus remains that the monetary authorities must continue to focus on inflation so as to continue to bring it down. But while monetary authorities are doing their work to bring down inflation, they must also keep an eye on the stability of banking systems through monitoring, supervision, and regulatory frameworks.

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

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