Worried by the divergent positions of monetary and fiscal policy managers on key national economic issues in recent times, the Central Bank of Nigeria (CBN) and leaders of three key ministries driving the economy met at the weekend to seek ways of harmonising monetary and fiscal policies.
The high level meeting held in Abuja involving the governor of CBN, Godwin Emefiele, Minister of Finance, Kemi Adeosun; Minister of Budget and National Planning, Udo Udoma, and Minister of the Trade and Investment, Okechukwu Enelamah, came as part of efforts to evolve best strategies to pull the Nigerian economy out of recession.
It also came about 48 hours to the second Monetary Policy Committee (MPC) meeting of the year at CBN corporate headquarters in Abuja, with the theme: “Pathway to Price Stability Conducive to Economic Growth”.
Speaking at the opening of the two-day MPC retreat, Emefiele reiterated the need for the country’s monetary and fiscal authorities to collaborate and harmonise standpoints so as to develop the economy rapidly.
Emefiele, who also chairs the MPC, said the MPC retreat, which for the first time had in attendance a large representation of the fiscal authorities, was coming at a period when the country faced serious economic challenges.
He added that finding a sustainable solution required a broadened participation of colleagues from the fiscal side.
He said that the retreat, as a brainstorming session, would provide perspectives on certain MPC decisions.
He said it would also close the gap on the coordination between monetary and fiscal authorities to chart a common course and take decisions to develop the economy.
In his remarks at the retreat, Udoma, said both the monetary and fiscal Authorities had no choice but to work together to guarantee the country’s economic growth.
He stated that the pathway to lower interest rate was to ensure monetary and fiscal authorities collaboration with the private sector.
Adeosun, and Enelamah both agreed that solving challenges facing the Nigerian economy required unconventional tactics.
She pointed out that a huge number of unbanked Nigerians whose contributions to the economy are hardly captured.
The Finance Minister said the government must devise ways to bring them into the financial mainstream, adding that based on the current realities, the federal government would have to borrow more to meet its infrastructural obligation.
Enelamah emphasized the need for both monetary and fiscal authorities to ensure business, market and investor confidence, as well as policy integrity, in order to improve on the ease of doing business in Nigeria.
In her presentation, “The Macroeconomic Trilemma and Monetary Policy in Nigeria,” Sarah Alade, the deputy governor, economic policy at the CBN, said the onus of achieving the trilemma of low interest and exchange rates as well as low inflation should not entirely be the function of the monetary authority.