The Central Bank of Nigeria (CBN) has pledged to recover intervention loans exceeding N10 trillion disbursed across various sectors.
The announcement was made by Olayemi Cardoso, The CBN Governor following the Monetary Policy Committee (MPC) meeting where the monetary policy rate (MPR) was raised by 400 basis points to 22.75 percent.
Cardoso relayed the need to tackle inflation, citing concerns over its persistent rise and the adverse impact on economic growth. He stated, “An enduring output expansion is possible only in an environment of low and stable inflation.”
The surge in inflation, reaching a record high of 29.90 percent in January according to the National Bureau of Statistics, was attributed to factors such as exchange rate pass-through, escalating energy costs, fiscal deficits, and security challenges in key food-producing areas.
Additionally, global factors like tight financial conditions and trade disruptions further exacerbated inflationary pressures.
The CBN governor highlighted the role of intervention spending in exacerbating inflation and distorting the economy.
He expressed concerns over the lack of effective monitoring and the adverse effects of unchecked inflows of money supply. Cardoso underscored the need for transparency in disclosing the extent of interventions and ensuring accountability.
Cardoso reiterated the CBN’s shift away from direct development financing, emphasizing the need for proper monitoring and partnerships with capable entities to prevent failed interventions.
He stressed the importance of interventions reaching their intended beneficiaries and signaled forthcoming transparency in disclosing intervention figures.
Furthermore, Cardoso addressed the undervaluation of the naira, pledging thorough investigations into distortions while promising repercussions for those found culpable.
