Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele, on Tuesday declared that the strategic health of the country’s financial system is still strong.
Emefiele also painted a gloomy picture of the sharp decline in the price of oil and commodity prices to the country’s economy.
The CBN boss spoke at a closed session with Senators in line with Section 8 of the CBN Act, 2007, which required that the Governor of the Bank provide, to the National Assembly, periodic updates on the activities of the Bank as well as the performance of the economy.
After the over one hour closed session, Senate President, Abubakar Bukola Saraki noted that the Senate in a closed door session with the CBN Governor deliberated on the new foreign exchange management policy and the determination of foreign exchange market by demand and supply mechanism.
Saraki added that the session also deliberated on the need to continue to grow the economy with focus on diversification of the economy.
A statement by the leadership of the Senate said that the CBN Governor presented a comprehensive and lucid account of the performance of the Nigerian economy in the last one year.
It said that Emefiele’s presentation began with current global economic conditions, which has been characterized by external shocks including the sharp decline in commodity prices, the geopolitical tensions along important global trading routes, and tightening of monetary policy in the United States of America.
It said that the CBN boss drew linkages of these occurrences with the Nigerian economy, especially with respect to the over 70 percent decline in oil prices from about S116 per barrel in June 2014 to about $30 per barrel earlier in the year.
It said, “The Governor’s presentation also gave us an insight into the Bank’s decisions in the Foreign Exchange Market, and the rationale underlying the recent re-introduction of a Flexible Exchange Rate Mechanism in Nigeria.
“He also delved into the health of the financial system and discussed the Bank’s detailed examinations of financial institutions as well as its zero tolerance for insider dealings by Board and Management of deposit money banks.
“In sum, the Governor declared that the Strategic health of Nigeria’s financial system is still strong at this time.”
It said that after the presentation, many Senators asked a host of pertinent questions and raised issues concerning the banking system, the slippage in economic growth for the first quarter of 2016, the gradual
rise in inflation, fall in foreign exchange reserves, and policy coordination between the fiscal and monetary authorities.
It said that following an exhaustive response by both the Governor and his team, the Senate acknowledged that “these are indeed difficult times all over the world and not just in Nigeria.”
“The Senate also acknowledged the pains that many people may be facing at this time, especially in light of increases in price of electricity and fuels.
“But having carefully considered the policies of the CBN, the Senate would like to commend and support these policies because they are mostly geared towards increasing local production, creating jobs here in Nigeria, safeguarding our commonwealth, and expanding economic opportunities and growth in Nigeria,” the statement said.
The Senate insisted that it is critical that all Nigerians put hands together to seek long term solutions to the country’s underlying problem of non diversification of foreign exchange earning and revenues, rather than pointing fingers or apportioning blames.
The Senators noted that they “believe strongly in the resilience of the Nigerian economy and the ingenuity of the Nigerian people and as such, we are confident that we will all pull through these difficulties and come out as a much better, equitable, and prosperous nation.”
A source at the closed door meeting also said that “at a time, the CBN governor told us that we should also work together to pull the economy out of trouble.”
He noted that “many of us believe that the economy is actually in trouble and something has to be done to rescue it in the interest of the country.”
Minister of Finance, Mrs. Kemi Adeosun will also face the Senate on Wednesday on the same subject matter.