The Central Bank of Nigeria (CBN) has stressed the need for the mobilisation of private sector funding to redress the country’s 22 million housing gap.
The Deputy Governor (Economic Policy) of the CBN, Dr. Kingsley Obiora, gave the advice in his personal statement at the last Monetary Policy Committee (MPC) meeting, a copy of which was posted on the regulator’s website at the weekend.
According to Obiora, the CBN has collaborated with the federal government and the private sector to stimulate the economy and prevent economic scarring, through various interventions targeted at households, SMEs, health, agricultural and manufacturing sectors.
He stated that whilst the impact of the policies on the economy was undeniable, but given the fragile recovery and coupled with long-standing infrastructural challenges, more action would be required to return the economy to full recovery.
He said: “For example, I believe this is the right time we start addressing the housing deficit by making a big push in mortgage financing to reduce the 22 million housing deficits in Nigeria. We also need to put in place a trade policy that will encourage SMEs, and boost non-oil exports, as well as invest more in infrastructure and the digital economy.
“This offers opportunities for investments and job creation that will boost economic growth in the near term. However, it will require mobilising private sector funds, especially in the light of Nigeria’s huge investment requirements and limited fiscal space.”
In his contribution, a member of the MPC, Mr. Robert Asogwa, stated that accelerating the distribution of bank liquidity to firms and households in a targeted manner would ensure an early return to pre-pandemic output levels. “There is a strong belief that the cost of withdrawing the CBN monetary stimulus too soon will exceed that of withdrawing it too late and it is thus important for the central bank to continue monitoring the domestic and global macroeconomic developments.
“Once there are clear signs that economic conditions are normalising, the bank should stand ready to take appropriate actions to address any upward pressure on inflation over the medium term,” he said.
In his contribution, the Deputy Governor, Operations Directorate, Mr. Adebisi Shonubi, said the country was facing the increasing need to refocus the economy and look beyond oil as many jurisdictions scaled down further investments involving the use of fossil fuel.
He said: “Interestingly, the speed and source of our recovery underscored the fact that recent economic downturn was strictly on account of external shock and not due to a weakness in domestic macroeconomic fundamentals.
“We must therefore take more steps to enhance domestic investment and productivity, as well as reinforce the internal stabilisers of the economy. Considering the observed gradual but steady positive outcomes of the current policy mix, I am convinced that as we strengthen implementation of the intervention programmes, we should maintain the status quo, and allow more time for the manifesting gains to fully mature.”
On his part, the CBN Governor, Mr. Godwin Emefiele, noted that short-term outlook of the economy continues to improve, congruent with strengthening global prospects. He reaffirmed that the CBN will maintain its collaboration with fiscal authorities to proactively target and stimulate high impact productive sectors of the economy.
Emefiele said long-standing structural imbalances and deep-seated supply-side constraints had propped inflation rates above the tolerance band of between six and nine per cent. According to him, the pervasive security strains, infrastructural debility, energy price shocks, exchange rate pressure, and COVID-19-induced vulnerabilities are the major cost-push drivers of inflation.
“The bank will continue to engage and partner with fiscal authorities on measures to dismantle the encumbering structural bottlenecks and correct inflationary trends. Financial market conditions during the review period were subpar, with a bearish stock market, tepid liquidity in the money market, and lingering exchange market pressure,” he said.