Emmanuel OchayiIn a landmark development, the Centre for the Promotion of Private Enterprise (CPPE) has praised the nomination of Dr. Olayemi Cardoso as the Central Bank Governor, asserting that he possesses the necessary academic, cerebral, and industry credentials to lead the apex bank.
In a statement released today, the CPPE presented a ten-point agenda for the new CBN Governor, highlighting critical areas of focus.
President Tinubu on the 15th of September 2023 approved the nomination of Dr. Cardoso, who subsequently assumed on Friday, 22nd of September 2023 as the acting governor of the CBN alongside four other deputies after Godwin Emefiele’s resignation, pending confirmation by the Senate.
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Speaking at a press conference, Dr. Muda Yusuf, Director/CEO of CPPE, emphasized the urgency of restoring confidence in the forex market. He stated, “Dr. Cardoso is assuming the leadership of the CBN at a very crucial time in our economic history. There is a serious confidence crisis in the foreign exchange market fueling an unprecedented speculative onslaught on the naira.”
Yusuf further highlighted the need to clear the backlog of forex obligations and called for strategic and transparent intervention in the forex market to minimize volatility.
The CPPE’s agenda also underscored the importance of deepening the financial system, particularly by addressing the challenges faced by the private sector in accessing credit.
Dr. Yusuf pointed out that “banking system credit to the private sector in Nigeria remains significantly lower than global and sub-Saharan averages,” and stressed the need to correct this anomaly.
Efficiency in the financial system was another key concern raised by CPPE. Dr. Yusuf expressed concern about the widespread between deposit and lending rates in the Nigerian banking system, which he described as “detrimental to investment growth and disincentive to savings.”
The CPPE called for a review of the minimum capital requirements for banks, considering the considerable loss of value amid a depreciating domestic currency. The organization urged the CBN to prioritize the recapitalization of banks to ensure the stability of the financial system.
Regarding ways and means financing of fiscal deficits, Dr. Yusuf emphasized the need to keep such finances within statutory limits to avoid damaging impacts on the macroeconomic environment.
The CPPE also suggested suspending the naira redesign policy indefinitely, focusing instead on sustaining the momentum for a cashless economy through less disruptive means.
Additionally, the CPPE called for addressing the issue of short-term funds in the banking system, emphasizing the importance of a more balanced maturity structure to support economic growth.
Lastly, the organization stressed the need to reduce concentration risks in the banking sector and called for enhanced stakeholder engagement and corporate governance practices within the CBN.
Dr. Yusuf concluded, “The CBN governor must observe the high standards of corporate governance to preserve the credibility and integrity of the apex bank. An apolitical CBN would be able to relate with any incumbent government, irrespective of the political party.”
As Dr. Olayemi Cardoso prepares to assume his role as CBN Governor, these ten points provide a comprehensive roadmap for addressing critical issues in Nigeria’s economic landscape.
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