Emefiele unveils agenda for Nigeria's central bank


From the press conference held, it is clear that Emefiele’s focus is on his plans for driving development and growth.

The vision of the Central Bank of Nigeria is to be the model bank delivering price and financial system stability and promoting sustainable development.

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“In order to realise the Central Bank of Nigeria’s vision, I believe that reasonably stable prices provide a catalyst for rational consumption, investment decisions and for order in economic progress,” Godwin Emefiele, Central Bank Governor of Nigeria said.

“I believe therefore, that we must start with championing policies that promote sustainability of our hard earned macroeconomic stability.”


“On monetary policy, we shall pursue a gradual reduction in interest rates. A comparison of selected macroeconomic aggregates from some emerging markets and countries including South Africa, Brazil, India, China, turkey, Malaysia indicate that Nigeria has one of the highest treasury bill rates,” he explained.

As such high rates create a pervasive environment for commercial banks to simply buy virtually risk free government bonds rather than lend to the real sector.

“To enhance financial access and reduce borrowers cost for credit, we will pursue policies targeted at making Nigeria’s treasury bills rate more comparable with other emerging markets and by extension, pursue a reduction in both deposit and lending rate,” Emefiele said.

A reduction in the deposit rate will encourage investor attitude in savers and a reduction in lending rates will make credit cheaper for potential investors.

“The bank will also begin to include the unemployment rates as one of the key variables considered for its monetary policy decisions.”

In the interim, the central bank will continue to maintain a monetary policy stance reflecting the liquidity conditions in the economy as well as the potential fiscal expansion in the run up to the 2015 general elections.


The bank’s key goal under the exchange rate policy would be to maintain exchange rates stability in view of the high import dependent nature of the Nigerian economy and significant exchange rate falls to a systematic depreciation of the naira would literally translate to considerable inflationary pressure with an effect of macroeconomic stability.

“Therefore, under my leadership, the bank will continue to focus on maintaining exchange rate stability and preserve the value of the domestic currency,” he said.

“We will sustain the manage float regime in the management of the exchange rate as this will allow the bank to intervene when necessary on the exchange rate. To support this strategy, we will strive to build up and maintain a healthy reserve position and ensure excellent balance.”

The governor believes that there is no doubt that reducing interest rates and maintaining exchange rates are very daunting goals and as such the bank will work with all stakeholders to devise measures that will ensure that these goals are mutually achieved.


The bank hopes to sustain the effective management of potential threat and avoid systemic crisis.

“The core of my vision is to effectively manage potential threats to financial stability and create a strong governance regime that will be conducive for financial intermediation, innovative finance and inclusiveness.”

In this regard, the bank hopes to anchor on two main pillars which manage factors that create liquidity shocks and zero tolerance on practices that undermine the health of financial institutions.

“In order to achieve these goals, we would warn all the relevant stakeholders to aggressively shore up reserves. We hope to engage the fiscal and political authorities as well as other stakeholders to improve our policy buffers which will further create space for the bank to implement policy using its limited instruments.”