Over N10trn intervention funds by CBN damaging Nigeria’s economy – Cardoso

THE Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said the over N10 trillion intervention funds granted by the apex bank caused severe damage to the country’s economy.

Cardoso said during a press briefing after the two-day Monetary Policy Committee’s (MPC) meeting on Tuesday, February 27.

The committee, after its 2-day meeting, raised the monetary policy rate (MPR) by 400 basis points to 22.75 per cent from 18.75 per cent to combat the soaring inflation in the country. 

The committee also adjusted the asymmetric corridor around the MPR to +100 to -700 from +100 to -300 basis points and raised the cash reserve ratio (CRR) to 45 per cent from 32.5 per cent.

Responding to a question on intervention, the CBN governor said, “The interventions that took place in the recent past were estimated in excess of 10 trillion naira. I am not talking about ways and means; I am talking about the interventions. 

“What was the budget of the Federal Government of Nigeria? What was the budget of the largest state in Nigeria? Do the math, and it will tell you the extent of damage.”

Had the N10 trillion been effectively utilised, it would have done much good to the economy, Cardoso lamented.


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He said the apex bank under his administration had moved away from granting interventions as the reason should not be far-fetched.

He noted that Nigerians were concerned about the surging inflation and relative influence on price stability and that the CBN would do everything to fight the ‘monsters ‘distorting the Nigerian economy.

Stressing that the interventions were dysfunctional, he said, “One, it takes away a lot of your time for something you do not have the expertise to do. And two, if not carefully handled, (it) creates a lot of distortions in the economy, even the inflow of money supply.” 

Cardoso maintained that the CBN would no longer be involved directly in interventions but would partner with entities that could handle them.

He assured that the CBN was doing all within its powers to monitor and recover the intervention monies damaging the economy.

“What has gone out, we have to ensure that we monitor them to ensure they come back in, and we are doing so.

“We are already doing that, and with the various degrees of success at some point in time and the interest of transparency, those figures will be made public,” he said.




     

     

    He also assured that the time of failed intervention was over and would block any intervention with the potential to fail and would not get to the people it was intended for in the first place.

    Cardoso defended his earlier remark that the naira was undervalued, blaming it mainly on what he called the “technical side” and assuring that the distortion in the system was removed.

    Hinting that the apex bank was investigating some of the distortions, Cardoso said, “I may not be able to speak much on it, unfortunately, but as and when we come up with these distortions, take them off and throw them away. Where there are distortions as a result of bad behaviour, we will ensure that those who do it will face the music and act as a deterrent to ensure others in future do not go that route.”

    The ICIR reported how the CBN intervention in the Anchor Borrowers Scheme to boost agriculture and stop rice importation faced challenges in several states and why the whole intervention needed a total overhauling.

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