Emefiele Faults Osinbajo’s Position On Monetary, Fiscal Policy Coordination

The Central Bank of Nigeria Governor, Godwin Emefiele, has faulted the position of Vice President Yemi Osinbajo on the synergy between the fiscal and monetary authorities.

The CBN governor said the two authorities are only answerable to President Muhammadu Buhari, who has not faulted the handling of the policies.

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Emefiele’s reply is coming a month after the VP faulted his forex policy during the ‘Mid-Term Ministerial Performance Review Retreat’ of the Economic Sustainability Plan.

Osinbajo had at the meeting questioned the legitimacy of CBN interventions, adding that the apex bank should allow fiscal authorities to handle interventions meant for Micro, Small and Medium Enterprise.

The VP had said, “But I think that one of the most important things is that there must be a synergy between the fiscal and monetary authorities which is absolutely crucial.

“We must be able to deal with the synergy, we must handle that synergy between the monetary authority the CBN and the fiscal side. Sometimes it appears that there is competition between them, especially on the fiscal side.”

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But in an interview on Arise TV which was monitored by THE WHISTLER , Emefiele said he is not answerable to the VP on economic issues.

The CBN boss said it is within the discretion of the President to judge if there is synergy between the two authorities.

Emefiele said, “I’m sure if you ask the Finance Minister that we are in the same contact with, she will tell you that there are no issues about the relationship between the monetary and the fiscal authority.

“When people come and say there is no synergy again, I wonder where that is coming from.

“However, let me say this. When Covid hit, Mr President asked the Finance Minister and I together to bring out some immediate response. I went back to the Bankers’ Committee and we came up with immediate response and the Minister of Finance and I had the opportunity several times to brief the President.

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“So, it is left for him to respond whether there is collaboration between the monetary and the fiscal authority.”

Emefiele further explained that all the interventions from the CBN to the different sectors of the economy were funds taken from banks’ cash reserves with the apex bank.

He said, “The Central Bank played an active role in the development of that programme to the extent that the fiscal authorities were only made to contribute N500bn and the monetary authorities were left to provide almost about N1.5trn.

“Please let me correct this, [the N1.5trn was] not as grants, but as loans to support people who were impacted by Covid-19 so that they can get their business back.

“If what people expect is that the Central Bank or monetary authority should hand over and give it to the fiscal, then unfortunately, that is not the way it works.

“It is meant to be a loan. It is not meant to be delivered to any particular group in the fiscal to begin to share. It is meant to be a loan and let’s not forget. It was also the ingenuity on the part of the Central Bank.

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“This is not Central Bank money. This is not Federal Government money. These are funds sequestered from the Cash Reserves Deposits of banks which have to also go back through the banks to those that we are lending money to at five per cent for ten years with two years moratorium.”

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