The Centre for the Promotion of Private Enterprise (CPPE) has charged the Governor Yemi Cardoso-led Central Bank of Nigeria (CBN) to adopt a moderated hawkish policy stance ahead of the apex bank’s 2-day Monetary Policy Committee’s (MPC) meeting scheduled to be opened today in Abuja.
The Director/Chief Executive Officer of the private sector advocacy group, Dr Muda Yusuf, in a Note on the review of the two years of Yemi Cardoso as CBN Governor, maintained that though the apex bank had achieve some success in its sustained policy measures to stabilize the financial system, its restrictive policies had worsened the credit constraints of businesses, particularly micro, small and medium enterprises (MSMEs) in the country.
For instance, the renowned economist stated that the CBN’s latest Monetary Policy Rate (MPR) at 27.5 per cent and the Cash Reserve Ratio (CRR)at 50 per cent had significantly raised the cost of funds and weakened private sector borrowing, particularly in manufacturing, agriculture, SMEs, real estate, and other sectors.
The CPPE boss noted that though the Cardoso-led CBN had undertaken reforms that enhanced financial system governance, promoted transparency, and restored credibility to the financial system, but that despite the scorecard, structural financing gaps remained unabated.
- Advertisement -
According to him, due to the gaps the MSMEs are currently expressing limited access to affordable credit while infrastructure, industrial, agricultural, construction, and real estate projects lack patient capital and affordable long-term funding mechanisms.
Yusuf, who commended the apex bank on liberalising the foreign exchange (FX) market, strengthening corporate governance, recapitalisation of banks to enhance banking sector resilience, and monetary tightening and liquidity management policy measures that had helped in moderating the inflation rate, however, warned that a fully market-based approach, while improving efficiency, has not addressed structural financing gaps.
To consolidate the modest achievements recorded by the CBN so far, the CPPE advocated the need for targeted interventions.
In addition, the OPS advocacy group recommended that the apex bank should calibrate its policies downward as inflation moderates to create a more enabling credit environment; develop credit guarantee schemes and concessionary financing programmes for SMEs and critical sectors; and promote development finance instruments to support infrastructure.
Similarly, it strongly called for the institutionalisation of governance reforms, stronger legal frameworks to protect the apex bank’s autonomy, and clear policy communication by it to manage market expectations.
The CPPE further canvassed: “The next phase of reform must focus on achieving a more balanced policy stance that supports growth while preserving macroeconomic stability.
“Addressing structural financing gaps and sustaining governance reforms will be critical for unlocking the financial sector’s full potential as a driver of inclusive economic development”, it added.
