Not since the former Central Bank of
To put things in perspective, the regulatory authority had largely cleared the self-serving, fraudulent, and false banking practices that almost collapsed the banking sector on our heads. It did so by pumping public funds into the banks and sweeping away the bad eggs. Some of us believe the rouge bankers got off too lightly, but that is another matter. While the "special interventions" worked fairly well in infrastructure (especially educational) in other areas it would appear that the banks cornered the funds, cleaned up their books by restructuring and refinancing the bad loans they gave, but they did not really make credit any easier to take.
In actual fact they mostly abandoned their job of intermediation. As financial intermediaries banks are supposed to take funds from people who have extra money or surplus savings (savers) and channel these (as loans) to those who do not have enough money to carry out a desired activity (borrowers) especially businesses. Aside from lending to a few large entities and making money from treasury activities and lending to governments the real sector was being effectively denied easy and affordable access to fund. They were just using their licenses to take deposits at very low interest rates and use it as they wished giving out to entities that could pay their exorbitant charges.
This is where the new CBN Governor's vision statement should be placed. In his first public statement titled "ENTRENCHING MACROECONOMIC STABILITY AND ENGENDERING ECONOMIC DEVELOPMENT IN
Another area I am really excited about is his solid grasp of the developmental role of the modern central banker. Moving away from the ideological baggage often stated as "government has no business in business" Emefiele clearly shows his appreciation of the need to go beyond the traditional preoccupation with only managing interest rates, money supply and inflation to direct intervention in stimulating specific sectors that have the most likely beneficial impacts on our welfare and the future of our nation. Permit me to quote him extensively:
"For quite some time, the dominant school of thought regarding central banking was that focusing on low inflation will eventually lead to greater growth, increase in employment generating activities, and poverty reduction. However, early and recent evidence of central banking in places such as
"Additional measures would be required towards identifying productive sectors of the economy and channelling credit towards these sectors, while imposing proper monitoring and performance measures in order to ensure that the goals of increased employment and poverty reduction are attained. This will require a review of the Bank's development finance program, the participatory agencies responsible for the disbursement of funds, improving our monitoring capacity and developing performance targets relevant to our focus on generating employment and poverty reduction. To be effective, the measures taken by the Bank will not work in isolation."
A related innovation is his commendable decision to include the unemployment rate as one of the key variables considered for its Monetary Policy decisions while working with other agencies especially the fiscal authorities to reduce structural distortions to productive growth.
While a more detailed appreciation of his first statement of intents would be attempted subsequently I would end by repeating Emefiele's own closing remarks:
"We must, by now, have been tired of hearing people talk about the "potentials" of
Mr Governor, we welcome you and look forward to your actualizing these promises.
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