CBN’s New Monetary Policy Won’t Lead To Economic Growth – Obaseki

Governor Godwin Obaseki of Edo State has flayed the Central Bank of Nigeria for raising the Monetary Policy Rate (MPR) by 22.75 per cent amidst the economic hardship in the country.

Obaseki stated that the Apex bank’s decision will further worsen the country’s ongoing economic challenges.

The governor made this known in a speech as a guest speaker during the Annual Dinner of Edo Zone Bankers Committee in Benin City, the state capital.

Recall that the Monetary Policy Committee of the CBN had raised the benchmark interest rate by 400 basis points to 22.75%.

The CBN Governor, Olayemi Cardoso, revealed this during the announcement of the first MPC meeting of the year in Abuja last Tuesday.

According to the Edo governor, the increase in the MPR will not lead to fundamental and fiscal growth in the economy.

Obaski said the government must focus on increasing production, ensuring citizens produce the goods and services they consume and depend less on imports.

He said, “I understand that the monetary rational for increasing MPR but fundamentally and fiscally, it is not going to lead to growth in our economy.

“We must focus on the fundamentals which is increasing production, making sure our citizens produce the goods and services we consume and depend less on import.

“Our economic policy and monetary policy cannot be determined by exchange rate alone. So, this whole issue of increasing the cash reserves in a bid to tighten liquidity is going to be detrimental to our economy. I understand the challenge the monetary authorities face but unfortunately you cannot plan with one hand.

“The economy is about the fiscal and monetary policies, both must work hand in hand and when they don’t, as they don’t in Nigeria, we will have crises. So, we should focus on fiscal issues so that we can grow our economy out of the challenges we have.”