CBN expresses worry over rising public debt, describes 0.51% GDP growth as fragile

THE Central Bank of Nigeria (CBN), on Tuesday at the Monetary Policy Committee (MPC) meeting, raised concerns about the country’s rising debt, describing it as worrisome.

The CBN also described the latest 2021 first quarter Gross Domestic Growth (GDP) growth as fragile.

Central Bank Governor Godwin Emefiele said amid GDP growth recoveries being recorded by the global economy, the bank would be more determined to expand several of its interventionist programmes on the economy to improve and create wealth.

“It is important to note that for us at the Central Bank, we are not surprised at the recorded growth. We made efforts to be pro-growth and adopted variable measures that will reign inflation and manage growth output,” he said.

Emefile said the bank adopted certain measures to mop up liquidity and increase supply in the economy.

“In the process, we reduced money supply to control inflation, mopping liquidity, while using development financing to increase interventions in real sectors and improving lending at the concessionary rate. These are some of the steps we take and we are not surprised at the results we’re seeing.”

Speaking further on the measures taken by the CBN to spur grwoth, Emefiele noted that, “When the pandemic started, we said that all the facilities we give out must be at five per cent. We also asked the banks to restructure some of the facilities to support businesses being adversely affected by the pandemic.”

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He explained that the bank started with N100 billion targeted facility, increased it to N150bilion, and further to N300billion at the last meeting.

“For the health sector, we made available a stimulus of N100 billion to enable some of our moribund pharmaceutical industries to come back alive. We supported our hospitals so that they could provide health facilities. These are some of our the stimulus that we used in supporting consumption expenditure,” he said.

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The apex bank governor, who described Nigeria’s peculiar economic situation during the peak of the pandemic as ‘stagflation,’ whereby inflation and prices ran high concurrently at the same time with the contraction of the GDP, said the CBN’s responsibility was to manage inflation by ensuring that price and stability mandates were prioritised.

Emefiele further said the apex bank’s MPC voted to consolidate policies to spur output growth.

“We expected what is happening now in growth in the manufacturing sector. We mapped out N1 trillion and have disbursed N856million to manufacturers, in agriculture and mining sectors.”

‘We targeted interventions to support output growth and it reflected in the first-quarter GDP growth. What we want to continue is to consolidate these interventions and growth,” he noted.

Borrowing spree, debt service cost expose Nigeria’s precarious financial situation

He said the MPC decided to build on the recorded successes, noting that the bank would continue to build on its interventions at a subsidised interest rate with targeted credit facilities to continue pushing for growth for the economy.

“Hence, we would make more money available to households, to small businesses for them to go back to business to grow the economy,” he assured.



    As of April 2021, the headline inflation was 18.12 per cent, food inflation stood at 22.72 per cent, while core inflation was at 12.74 per cent. The NAFEX exchange rate stood at N410.25 and oil price was $66.1.

    Nigeria’s GDP grew by 0.51 per cent in real terms in the first quarter (Q1) of 2021, marking two consecutive quarters of growth, data released by the National Bureau of Statistics (NBS) on Sunday showed.

    The uptick in growth was driven mainly by the manufacturing sector which grew 3.40 per cent(year on year) within the period, higher than -1.51 per cent in the fourth quarter (Q4) of 2020 and 0.43 per cent in first quarter (Q1) of 2020.

    On the other hand, data obtained from the Debt Management Office (DMO) reveal that Nigeria’s total debt was N32.9 trillion at the end of December 2020, while debts owed to non-Nigerian lenders was pegged at N12.7 trillion.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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