Lagos, Sept. 24, 2023: The Centre for the Promotion of Private Enterprise (CPPE) had unveiled a ten point agenda proposition for the new governor of the Central Bank of Nigeria (CBN), Dr Olayemi Cardoso.
Founder, CPPE, Dr Muda Yusuf, made this known in a statement on Sunday in Lagos.
Cardoso was former Chairman, Citibank Nigeria, and has served for over 30 years across many organisations and sectors.
According to Yusuf, Cardoso’s nomination as CBN’s Governor is highly commendable given his pedigree, disposition, character, cerebral and industrial credentials to head the apex bank.
He, however, pointed out that the most urgent task and most critical agenda before the new CBN governor was the restoration of confidence to the foreign exchange market.
This, he said, was because Cardoso assumed leadership at a very crucial time in the country’s economic history when serious confidence crisis was rocking the foreign exchange market.
He added that the Nigerian economy was grappling severe adverse effects of depreciating exchange rate, soaring energy costs, ravaging inflationary pressures and huge backlog of foreign exchange obligations.
Yusuf said the economic management orthodoxy of market forces was being called to question in the light of the social outcomes of the market-oriented reforms.
“The CBN must ensure strategic and transparent intervention in the foreign exchange market to minimise volatility, as far as the reserves can support.
“In addition to the I and E window, it has become necessary to create an autonomous window in the banking system where the currency can trade freely without any encumbrances.
“This is necessary to avert the diversion of remittances to other jurisdictions or the black market seeing we cannot afford to live in denial at this time.
“Also, the clearance of the backlog of foreign exchange obligations should be accorded high priority to restore the confidence of domestic and foreign investors, “he said.
Other agendas, the CPPE boss, said included deepening the financial system, improving the efficiency of the financial system and reviewing the minimum capital requirements of the banking industry.
He added that the CBN governor must ensure that the ways and means finances of the CBN must be kept within statutory limits to avoid the damaging impacts of high-powered money on the macroeconomic environment.
“It is imperative to deepen the financial intermediation role of the deposit money banks, which is their primary role in an economy.
“This responsibility entails the mobilization of financial resources from the surplus end of the economy, to the deficit segment of the economy.
“The spread between deposit and lending rates in the Nigerian banking system is too high and is an indication of serious efficiency issues in the banking system,” he said.
Yusuf added that the Naira redesign policy should be suspended indefinitely as there was really no compelling argument to undertake the redesign in the first place.
He, however, advised that the momentum for the cashless economy should be sustained without resorting to the crude methodology of cash confiscation adopted by the previous dispensation in the CBN.
He urged the CBN governor to address the tenure and cost of funds in the banking system, with steps taken to reduce concentration risks in the banking system.
“Currently, the top ten banks account for over 80 per cent of bank assets, total loans, and deposit liabilities.
“This structure poses systemic vulnerability risks as better spread of assets and liabilities in the banking system is desirable.
“The CBN governor also needs to relate well with stakeholders, both in the public and private sector and this is without prejudice to its autonomy or regulatory effectiveness.
“Such collaboration would enrich the quality of monetary policy through beneficial feedbacks and empirical content and will also provide insights into the peculiarities of the economy.
“On governance, the CBN governor must observe high standards of corporate governance to preserve the credibility and integrity of the apex bank,” he said.