Sanusi: No Cause for Alarm on National Economy


From in Abuja, 07.29.2010 


Governor of the Central Bank of Nigeria (CBN), Malam Sanusi Lamido Sanusi, yesterday did a critical review of the national economy at the meeting of the Federal Executive Council (FEC) and concluded that there was no cause for alarm.Sanusi declared that the economy is, as expected has, steadily growing in Gross Domestic Product, pointing out that there been moderation in inflation.In his presentation on the economy for the second quarter of the year at the meeting, which was presided over by Vice-President Mohammed Namadi Sambo, he said that interbank rates and other money market rates, including lending rates, are also moderated.


He specifically told the Council that the national economy grew by 7.63 per cent within the period. Consequently, FEC has directed the Economic Management Team (EMT) to coordinate other sectors of the economy to key into the success with a view to ensuring even national development within the financial sector.Briefing State House Correspondents after the meeting, Minister of State for Information and Communi-cations, Mr. Labaran Maku, said Sanusi also stated that the Foreign Exchange (forex) market was substantially stable.He said the CBN Governor explained that the recovery in the capital market had continued, stressing, however, that the growth in monetary and private sector credit aggregates had remained slow.


The Minister said Sanusi told the Council that the implementation of the banking sector reforms has continued to stimulate confidence in the system. He said the CBN Governor further disclosed that the reform had also engendered credit growth by the rescued banks while most of them had returned to profitability. Maku quoted Sanusi to have said, “The modality for operationalising the AMCON, which Act was signed into law by Mr. President on July 19 2010, is being finalized (by the) system.“Without the establishment of AMCON, the rescued banks would have been eventually liquidated if there are no viable buyers.


“He stated that the guidelines for the implementation of the N500 billion for refinancing and restructuring manufacturer’s exposures to the deposited money have been prepared, out of which approval to disburse N130 billion has been granted. “He also briefed the council on the Bankers committee initiatives to support government economic programmes such as interactions with State
governments in order to generate a pipeline of projects that the financial system will fund, support towards the effective use of infrastructure bonds and providing economic advocacy for power and agriculture.”

Maku stated further, “Sanusi concluded that the Nigerian economy remains resilient and that the near-to-medium-term outlook is positive and that monetary policy will continue to be supportive of government objectives, and that stronger growth that will create employment can be achieved with the provision of critical infrastructure and the concurrent implementation of on-going reforms in all the sectors of the economy.”He said that the FEC appreciated the “candour and depth” of Sanusi’s report on the economy, especially his determination to press ahead with critical reforms in spite of pressures from vested groups to overturn the reforms which have saved the nation’s financial sector from profound crisis.


According to him, “The report (as presented by the CBN governor) shows economy on sustainable growth, especially the non-oil sectors led by Agriculture, retail trade, services and construction.“The need for deeper reforms in the Energy, Petroleum and Power sectors was emphasized to realign economic policies to the financial reforms to encourage credit flow into the real and strategic sectors of the economy. “CBN should shield AMCON from the sharp practices and financial engineering of the past that have plunged global and natural economies into avoidable crisis.”He said that Council was encouraged by the CBN effort to align the financial sector with international best practices and assured the CBN that government would support its reforms.


Maku disclosed that government underscored the need for proper coordination between the CBN and the EMT to ensure reforms were properly channelled towards the real sector of the economy. According to him, “Government is confident that with all that is going on in terms of reforms and policy focus, the nation’s economy will witness sustainable growth in the years ahead.”





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