Former Governor of the Central Bank of Nigeria (CBN), Muhammad Sanusi II has opened up on how former President Muhammadu Buhari triggered inflationary pressure in Nigeria and weakened the value of the Naira.
TheNewsGuru.com (TNG) reports Sanusi to have said CBN’s lending to the federal government under the administration of former President Buhari through Ways and Means triggered inflationary pressure and weakened the value of the Naira.
Speaking in Abuja on Tuesday at a two-day Premier Capital Markets Day Event organised by MTN, the former CBN Governor said Buhari’s 8 years saw the rapid expansion of the apex bank’s balance sheet through ways and means.
The 14th Emir of Kano said the CBN has, however, embarked on aggressive monetary tightening through various liquidity control instruments, including open market operations, Open Buy Back (OBB) and high T-bills rates, which Sanusi said is an indication that the bank was sticking to its core mandate of financial systems stability and inflation control.
“I am optimistic, especially in the short term. We’ve had eight years of rapid expansion of the central bank’s balance sheet through ways and means. And that has fueled inflation and weakened the currency. And that is the fact.
“If you look at OMO Bills and OBB rates in the last few weeks, I can see that the central bank has started a process of aggressive tightening. OBB rates are beginning to approach what they should be. And I think that’s what the market needs to look at; that the central bank is taking this role of tightening money and fighting inflation as a primary focus.
“For the short term, I don’t think we have a problem. I think the central bank is doing the right thing – tightening money, clearing the backlog, trying to fund the market, and I think we will have stability,” Sanusi II said.
TNG reports Ways and Means is a way in which the federal government raises funds by borrowing from the CBN. The CBN’s loan to the federal government hit N22.7 trillion, an amount the CBN said had been securitised not to dampen its balance sheet.
Speaking earlier at the event, CBN Governor, Olayemi Cardoso, represented by Director in charge of Research Department, Dr Omolara Duke, said the bank would return to its primary role of price stability.
Cardoso said “The Ways and Means will no longer be more than five percent, going forward. The period for the government to access Ways and Means is over” while adding that the central bank was looking at how to drive down the cost of remittances to increase the inflow and move them away from the informal sector into the formal.
Telecom sector contributes 16% to Nigeria’s GDP – MTN
Meanwhile, the Chairman of MTN Nigeria, Dr Ernest Ndukwe disclosed at the event that the telecom sector now contributes over 16 per cent to Nigeria’s Gross Domestic Product (GDP).
According to Dr Ndukwe, in pursuant to MTN’s vision 2025 strategy, the company had evolved from telecom to technology business, adding that it assured on building connectivity business while expanding its focus on platform businesses.
Ndukwe said that as the digital ecosystem continued to grow, MTN’s impact on the nation’s economy would continue to increase.
“MTN remains the largest network operator in Nigeria, and we recognise the enormous responsibility bestowed on us to continue to deliver world class ICT services to the people that patronise our services.
“We aalso seize strong oopportunities or growth in both our voice and data businesses as we work to increase our market permutations on geographical coverage.
“Our customers and their desires are the heart everything we do and plan for the future of the business. We are proud to say that the MTN ecosystem has directly or indirectly created employment for more that two million people, while supporting the livelihood of people across the country.
“We are fully committed to working with our partners and the Nigerian government to ensure that Nigeria’s digital economy has its full potential on customers and stakeholders,” he said.
In his remarks, the Chief Executive Officer (CEO) of MTN Nigeria, Mr Karl Toriola, expressed optimism that the economic challenges of the country were gradually coming to an end.
Toriola called on the stakeholders to enjoy the experience of the programme.
Mr Timi Popoola, CEO of Nigeria Exchange Limited, said the event would make both local and foreign investors stay close to the country, adding that it deepened interactions with MTN.
Popoola said that a sort code of *5474# was launched by MTN in order to get a bouquet of options, which include: opening and closing prices of any security listed on the exchange.
“We hope that this is the first step of using a tool like this to invest in a capital market,” he said.