AS the nation’s foreign reserves and Excess Crude Account continue to deplete, the Central Bank of Nigeria (CBN) has said the trend was worrisome given its negative impact on the Naira and the entire economy.
The CBN Governor, Mallam Lamido Sanusi, who stated this in Lagos at the 30th anniversary lecture organised by Udo Udoma and Bello-Osagie Barristers and Solicitors, also noted that the situation became worrisome as crude oil prices have remained above $100 per barrel.
“This problem is homegrown. People keep exploiting the oil and gas industry without paying for it. We have to put a control mechanism and stop the theft in this industry. The world is watching and they are seeing as our foreign reserve is going down and this is not good for the economy.
“When our foreign reserves and excess crude account is depleting, the world is watching. The investor in London, putting his money in the capital market is watching and may begin to speculate that the country may not be able to defend its currency in this situation.
“All it takes is for more persons to join him and the exchange rate is changed automatically and the five year stability is crashed. Issues of stability are not taken for granted anywhere and for us, we must block the leakages, stop the theft, and build back our reserves.
“I would rather fight for stability than lower interest rate because it is the stability that brings about lower interest rate and inflation and I still think that the monetary system is not tight enough, and for me I would still opt for additional 15 per cent private sector deposit and 100 per cent public sector funds,” he said
According to him, the monetary policy decision already taken on CRR has been vindicated as everyone can see that the Naira is under pressure.
He further disclosed that apex bank chief said that CBN was able to mobilise banks to support the ongoing power privatisation programme to the tune of $2 billion.
The move, he said, was in recognition of the fact that power infrastructure was strategic to the nation’s development.
He reasoned that if the economy was recording seven per cent growth rate amid the difficult nature of power supply, it would have taken over the global stage with effective system.
The apex bank chief also said that to further empower entrepreneurs at the bottom of the pyramid, as well as increase banks’ focus on agriculture, the CBN unveiled plans to increase financing initiatives in the sectors through partnerships with relevant stakeholders.
Specifically, he noted that CBN was working to increase its current per cent on agricultural funding to seven per cent by 2018, explaining that the move was to further give opportunities to farmers to have access to credit, fertilisers and drive the economy through the sector.
To him, banks were hesitant to lend to the agriculture sector due to the long payback period of the loans, noting that CBN started lending to the segment from zero to four per cent in two years.
He also stressed the need to get women fully involved in the development process of the country, saying that women contribute large quota in the nation’s quest for development.
“I want a bank to come up with a programme targeted at women. We are currently working with state governments to help lending to the agriculture sector which 60 per cent of that would go to women in the rural areas,” he said.