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Of capital flight and Nigerians

Recently, the Central Bank of Nigeria CBN, said Nigeria had not been negatively affected by capital flight.

Coming from the governor of the Central Bank of Nigeria, Mr. Godwin Emefiele himself, it could be quite re-assuring but mostly to the dites, who have not been fully exposed to the vagaries of the prevailing excruciating realties of the economic challenges that most other Nigerians are daily exposed  to in their daily quests to make life wholesome.

Mr. Emefiele had enthused that the situation was so owing to the robust monitoring mechanism emplaced by the   apex bank watching the activities of exit of portfolio investors.

The CBN governor also disclosed that the Monetary Policy Committee, MPC of the Cental Bank had at its latest meeting resolved to hold the interest rate at 11:5 percent. He explained that what the Monetary Policy Committee had been doing was to ensure a gradual, systematic and orderly exit of foreign portfolio investors from the country  further disclosing that some of the portfolio investors had  felt the yields on their investments were not as high as they had expected. According to  him, there were expectations from such investors that there should be provision of some, more edging instrument that will protect them in case they wanted to go out.

While assuring that there was no cause for alarm the apex bank governor revealed that the funds that will be leaving as a result of policy normalization from the advance economy did not come to Nigeria and so as they withdraw them, there is nothing to withdraw out of Nigeria because Nigeria is not part of that game.

The CBN governor was also insistent that there is no reason for MPC to begin contemplation of policy tightening because it is already moderately tightening the liquidity system through control and use of Cash Reserve Ratio, CRR, which are discretionary powers that the Central Bank has.

He hoped that the MPC would continue in this direction because the measures were already deriving  the desired expectations, stressing that the apex bank would do everything possible to ensure that the economy is not badly hit, enthusing that the economy had recovered from the temporary inflationary hock of December last year and had been moderated.

To further address the intervening problems that were destabilizing prices of commodities and informing inflation in the market and causing consumer hardship, most of them being logistic in nature, he said the Central Bank was encouraging, people interested in looking at how to resolve the logistical problems of delivering food from farm to market to come in and take advantage of some of those interventions that the bank has, regretting the activities of hoarders that are bent on making wholesome gains to the detriment   of innocent Nigerians.

The CBN boss also warned people that collect loans from unsupervised and unrecognized  loan sharks to desist from taking the big risk they were taking, noting that the CBN had taken note of the desperation of going to the loan sharks owing to the inaccessibility of banks and microfinance banks and had put in place an avenue through which people in need of cash can raise loans, known as the Target Credit Facility or SMEs loan that was set up through the microfinance banks.

The CBN governor said the MPC decided to uphold the prevailing Monetary Policy Rate, MPR, at 11:5 percent; Asymmetric Corridor of +100/-700 basis points around the MPR’s CRR at 27.5 percent and liquidity Ratio at 30 percent adding that the reason for holding unto the old parameters indicated a conservative but cautious and consistent policy choice given the prevailing economic conditions and out look, thus strengthening policy credibility  and focus. He said the MPC also felt that a hold would signed MPC’s realization of the fragility of the growth recovery and its sensitivity to emerging global and domestic uncertainties.

The good thing is that Nigeria has not lost any money in capital flight and so it behoves the Central Bank of Nigeria to ensure that no money belonging to Nigeria is repartriated  by the divesting foreign  portfolio investors.

What Nigerians expect from the apex bank is to protect them from going further down the poverty index by  ensuring that those in the line of sabotage to cause failure of well thought, out policies and actions aimed at stabilizing and growing the national economy in all ramifications of the economy are checked in their tracks. This surely needs active collaboration with the security agencies for success.

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