CBN disagrees with governors on recession alarm

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The Central Bank of Nigeria (CBN) has faulted the alarm raised by governors that the economy may relapse into recession by the middle of next year.

It would be recalled that the governor of Zamfara State and chairman of the Nigerian Governors’ Forum (NGF), Mr. Abdulaziz Yari, had at the opening of a three-day retreat for returning governors and governors-elect in Abuja on Monday, called on the incoming governors to brace for another round of recession.

But the governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele dismissed the governors’ claim at the public presentation of the Spring 2019 edition of Regional Economic Outlook (REO) by the International Monetary Fund (IMF) in Abuja.

Represented by the deputy governor in charge of economic policy, Dr. Joseph Nnanna, the CBN governor said the bank had done a lot in terms of tightening monetary policies to forestall any form of recession.

“We are making smooth progress towards growth and by end of 2019, all things being equal, we are going to likely have between 2.8 per cent and three per cent gross domestic product growth rate.

“Since the third quarter of 2016, when we started coming out of recession, we have embarked on tight monetary policy in all its ramifications.

“Right now, we are on the path of achieving our price stability goal of single-digit inflation. Are we going to witness increased inflation or are we sliding back into recession? My answer is no. But is that adequate? My answer is no.

Three per cent GDP real growth rate is not enough for Nigeria where our population growth rate is 3.2 per cent. Per capita growth rate is still negative but definitely, we are not going through the era of 2016 when we had a recession. That won’t happen – hopefully. Not under CBN watch,” he said.

He added that the major problem of Nigeria’s labour sector is more of under-employment than outright unemployment “because majority of Nigerians are employed one way or another, but they are functioning below capacity.

“They are engaged in the informal sector, which is not performing optimally. We also have a huge infrastructure deficit. Infrastructure is the major constraint to economic development and growth. This has to be repaired.”

He advised the governors and other policymakers to tackle the menace of non-inclusive growth because “it is inclusive growth that we need in Nigeria than any other thing.”

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