The Central Bank of Nigeria (CBN) and the MPC members have started a retreat in preparation for the Monetary Policy Committee (MPC) meeting on Monday and Tuesday in order to develop fresh concepts and instruments to support the implementation of monetary policy for the best macroeconomic results.
The MPC meeting, where the members of the committee decide the direction of the cost of borrowing and other macroeconomic indicators, is set to take place on Monday and Tuesday in Abuja.
According to Godwin Emefiele, governor of the CBN, this comes at a time when monetary policy has been severely tested and its policy space has narrowed noticeably in some cases, paradoxically, necessitating the need to rethink monetary policy in the context of new challenges and economic transformation.
The MPC’s chair, Emefiele, predicted that after the meeting, “we will witness a new enhanced monetary policy and a new improved Central Bank.”
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“While the Nigerian economy has experienced numerous crises, much like the economies of many other nations, we have been able to relatively weather the storm and have performed far better than many of our peers,” he said. “This is thanks to our bespoke and ingenious approach of adopting well-thought-out and home-grown policy measures to address our macroeconomic challenges.
He praised the retreat’s theme selection, “Monetary Policy Implementation in a Digitally Evolving Developing Economy,” noting how FinTechs, Cryptocurrencies, Digital Payments, Artificial Intelligence, and Machine Learning have changed how the financial and banking sectors operate both internationally and domestically.
“Therefore, there is an urgent need to reconsider financial system legislation, supervision, and the implementation of monetary policy. Although there are many risks and uncertainties associated with the innovations for the various industries, he added that they also have many advantages for positive economic transformation, particularly financial inclusion, which has been the main driver of inclusive growth, poverty reduction, and job creation.
He claims that the Central Bank of Nigeria has promoted the idea of financial inclusion in order to achieve the SDGs. This includes the recent introduction of the eNaira (CBDC) to bring the substantial unbanked population into the formal economy as well as to increase the effectiveness of monetary policy and have a positive impact on the population’s higher standard of living.
In addition, while the post-COVID growth recovery in Nigeria can be described as moderate and stable, we have seen a significant change in the key sectoral drivers of that stable growth phenomenon, including the services sector, modernized agriculture, and manufacturing, suggesting that technology and innovation is playing a significant role in output growth and economic development in Nigeria. In order to increase the contribution of technology and innovations to the growth equation, it is necessary to investigate new avenues for adjusting monetary policy tools.