Fidelity Bank MD commends CBN’s monetary policy during recession

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*Okonkwo

The managing director and chief executive officer of Fidelity Bank Plc, Mr. Nnamdi Okonkwo, has attributed Nigeria’s exit from recession to the Central Bank of Nigeria’s (CBN) ingenuity in managing the monetary policy while the recession lasted.

Speaking in an interview in Lagos, Okonkwo applauded the CBN governor, Mr. Godwin Emefiele for not succumbing to mounting pressure to devalue the naira.

Instead, he said the governor tackled the issue from the retail end of the market by opening up a window in which banks were given $2 million weekly to enable individuals buy foreign exchange to pay the tuition fees of their children in higher institutions abroad

“On the monetary side, I want to commend…Mr. Godwin Emefiele and his team because they were under intense pressure to devalue the naira but they stayed focused to address the issue from the retail end of the market by opening up a window where banks were given $2 million weekly to enable individuals buy foreign exchange to pay the tuition fees of their children in foreign higher institutions and before you know it the exchange rate dropped from N520 per dollar to about N370 presently.

“Besides tuition fees, the apex bank also allowed small and medium-sized enterprises (SMEs) and operators in the aviation industry to have access to foreign exchange; but perhaps the most significant move by the CBN in stabilising the currency was the introduction of the investor/exporter foreign exchange window, which has resulted in major inflows by portfolio foreign investors,” he said.

However, Okonkwo said a lot of things slowed down during the recession though he could not put a figure to it.

“Recession simply means negative growth in an economy over a specific period of time. I am not in a position to quantify the damage, but I am in a position to know that a lot of things slowed down in line with the slowing economic growth, because the banking industry is a melting pot of what goes on in the economy.

“For instance, if my bank has a customer at Idumota in Lagos who normally lodges in N1 million into his account daily and now he is lodging N200, 000, it is because the engine of what was responsible for generating those revenues is no longer firing as before.

“Also, if a bank gives out a consumer loan and it is not performing, it is probably because that consumer, that government employee or corporate employee is not getting his salary on time in line with the situation in the economy.

“The same thing goes for when a bank finances a factory that was expanding its production line to increase output and suddenly that factory realises that it cannot kick off that line because there is no longer demand for its products because of a general slowdown in demand.

“So, I am not be able to calculate the quantum but in terms of everyday impact on business, it was a thing everybody felt,” he stressed.

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