The Lagos Chamber of Commerce and Industry LCCI has commended Central Bank of Nigeria CBN on the planned recapitalisation of Deposit Monetary Banks DMBs, urging it to ensure transparency and synergy between monetary and fiscal authorities.
In the new move, LCCI tasked CBN to effectively communicate significant changes in policy direction.
The Chamber gave the task in a press statement signed by its Director General, Dr Chinyere Almona on Monday.
CBN Governor, Yemi Cardoso, spoke at the Chartered Institute of Bankers of Nigeria’s 58th Annual Bankers’ dinner last Friday, reiterating the planned recapitalisation, saying that the CBN would be directing banks to increase their capital base to serve a $1 trillion economy.
Almona admitted that recapitalisation is in order, due to consistent devaluation of the Naira, which she said has eroded the capital base of banks.
She said the policy would attract significant investment into banks, as well as increase their capacity to provide the required support for the economy.
However, LCCI called the CBN to strengthen its banking supervision so as to avoid “Too big to fail” banks.
“Given the sensitivity of monetary policy and price stability, we urge the CBN to ensure transparency and synergy between monetary and fiscal authorities and effectively communicate significant changes in policy direction” Almona said.
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She recommended that CBN should adopt the right policy mix to control high inflation effectively and ensure the stability of the exchange rate in order to support growth and job creation.
Almona stressed the need for CBN to be committed to promoting integrity, good corporate governance, and the highest ethical standards.
LCCI commended Cardoso on his successful outing at the dinner, which also marked the Institute’s 60th Anniversary.
The statement reads in part: “However, we are concerned about the state of the economy, particularly the volatile foreign exchange situation, high inflation, and general uncertainty.
“Over the year, the Chamber has consistently expressed concerns about the implications of high inflation, high interest rate and unstable exchange rates on businesses and households.
“The Chamber is aware of the enormous challenges and the uphill task before the CBN in ensuring macroeconomic stability and restoring investors’ confidence. However, we note the inconsistencies between the federal government’s vision of achieving a $ 1 trillion economy in the next six years and the medium-term expenditure framework (MTEF)”.
LCCI said macroeconomic projections in the MTEF state that the economy “will grow by 3.76%, 4.22%, and 4.78% in 2024, 2025, and 2026, respectively. We note that the projected growths are sub-optimal to achieve a $1 trillion GDP by 2029, which implies an average growth of 21% over the next six years”.
The Chamber appreciated the intellectual humility of the CBN Governor in admitting the errors or mistakes of the past, particularly, in the areas of corporate governance failures, diminished institutional autonomy of the CBN, deviation from the core mandate of the Bank, and unorthodox use of monetary tools and foray into fiscal activities under the cover of development finance activities.
“As we advance, we challenge the current CBN team to ensure professionalism and integrity and rebuild the trust of the general public” Almona stressed.
