- The new CBN governor said the focus will be on resolving the backlog of unpaid foreign exchange
- He said the past CBN leadership failed to draw the line between monetary policy and fiscal intervention
- He said the CBN would effectively perform without the distraction of development financing
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He said this on Tuesday, September 26 during the senate screening session, according to Punch.
Cardoso pledged to improve corporate governance, increase transparency, and uphold the bank's independence and integrity.
The new CBN governor also promised to uphold price stability, return to evidence-based monetary policy, and end his predecessor's unconventional monetary measures to support the naira.
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Cardoso's screening takes place as the country struggles with declining economic indicators.
Cardoso to suspend intervention
During his screening, Cardoso stressed the need to regain the CBN's independence and credibility by focusing on its fundamental mission and fostering a compliance-oriented culture.
He said much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have been burred.
“In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”
About N9 trillion has been released as intervention money by the apex bank as of October last year.
According to the bank, beneficiaries had already paid back over N3.7 trillion, but over N5 trillion was still owed for recovery.
The international banker stated that the team would assess the problem and determine the necessary position for unhealthy bank charges.
Anchor borrowers programmes
The new governor of the apex bank believes that rather than actively participating in a prominent position in the financing of these projects, the bank needs to transition into a limited advising role that supports economic growth.
Godwin Emefiele, the former governor of the CBN, claimed in 2015 that the bank has contributed to funding federal government initiatives and activities aimed at promoting growth throughout the years.
To promote the growth and development of the nation's economy, he said that these involvements are incidental to the bank's main mandates and a component of its corporate social responsibility.
Many different plans and schemes are specialised either carried out directly, in collaboration with the Federal Government, or through specialised financial institutions.
According to the CBN, providing financing to various economic sectors will foster the expansion of the economy and is one of the conditions for sustainable economic growth
The country's economy will be served more effectively by an apex bank without the distraction of development financing, according to the incoming CBN governor.
“Given this, a refocused CBN will better serve the country through monetary policy interventions and advisory rules that sustain the implementation of the administration’s fiscal proposals.
“Advisory role of CBN, much has been made of past CBN forays into development finances, such that the lines between fiscal policies and fiscal intervention have become blurred. In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”
Meanwhile Legit.ng earlier reported that the CBN is set to recover loans it granted to some Nigerians to cushion the impact of COVID-19. President Bola Tinubu reportedly gave security agencies a deadline to go after the Anchor Borrowers Loan Scheme defaulters.
“No Mercy”: Farmers Speaks As Tinubu Orders Security Agencies To Recover Over N1trn CBN’s Loan
The All Farmers Association of Nigeria (AFAN) earlier backed Tinubu’s order to security agencies to recover the CBN's Anchor Borrower loans to farmers.
According to an earlier report, Tinubu asked the CBN to work with security agencies to recover the loan from defaulters on or before September 18, 2023.
Speaking on the loans yet to be recovered, the national president of AFAN, Ibrahim Kabir, said non-farmers largely accessed the N2.6 billion loan, hence the difficulty in recovering the loans.