How Nigeria can avert economic crisis – Sanusi

GOVERNOR of the Central Bank of Nigeria (CBN), Mallam Lamido Sanusi, has called for fiscal restraint and consolidation to counter the impending economic crisis.
Sanusi, speaking at the 46th annual dinner of the Chartered Institute of Bankers of Nigeria (CIBN), in Lagos, at the weekend, stressed the need to continue to build up the external reserves and protect the economy from external shocks to oil prices and focus on the strength and resilience of the banking system.
According to the CBN governor, banks were not set up to invest in government bills alone, but primarily to mobilise savings and move the savings into the real economy, where real production, real jobs and real income were created.
“It is important not to be complacent and to recognise that there are dark clouds in the horizon and it is extremely important to start building and continue building the fiscal buffers, go into a period of strong restraints and serious fiscal restraints and consolidation,” he said
He pointed out that over time, the apex bank had been able to stabilise the exchange rate and control the inflation rate due to its tight monetary policies, adding that CBN was also building buffers for the economy in the event of an external shock.
“Our foreign reserves currently stand at $45.68 billion. We have kept exchange rate stable within our announced band of N155 +or – 3 per cent.
“In a year which removed 50 per cent of fuel subsidies, where you have very high increase in international food prices and energy prices, where you have general instability and where we had forecast that inflation might reach 14.5 per cent in August, inflation is still under 12 per cent.
As of September, inflation was 11.3 per cent, but we expect that there might be an inching up in food inflation figures expected to come out on Monday, but because of the tight monetary conditions we have kept he now have a moderation in core inflation,” he stated.
Sanusi disclosed that the International Monetary Fund (IMF) had just concluded a financial stability assessment progra-mme and was impressed by the work that had been done in the banking sector, stressing that the nation’s banking industry, with average capital adequacy ratio of 17 per cent, was one of the highest in terms of capitalisation in the world.
He pointed out that CBN was steps ahead the  world, stating that while the rest of the world was still debating what they would do with universal banking, the apex bank had already dismantled it.
Culled: Tribune