- Urges Nigerians to embrace new naira notes.
- Projects inflation will fall below 15% in 2023.
- National Domestic Card Scheme To start on January 16, 2023.
Governor, Central Bank of Nigeria, CBN, Emefiele has said that tackling the problem of oil theft is critical to building robust foreign exchange reserves and achieving a stable naira exchange rate.
Emefiele stated this in a keynote address delivered at the annual Bankers Dinner Night of the Chartered Institute of Bankers of Nigeria, CIBN, where he also presented an outlook for the nation’s economy in 2023.
Despite the decline in foreign reserves, Emefiele expressed optimism that the short-term outlook of the Nigerian economy remains sound.
According to Emefiele, Nigeria’s foreign reserves receipts declined from US$3.0 billion monthly to zero.
“The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above $3.0 billion monthly in 2014 to an absolute zero dollars today,” said Emefiele.
He emphasised how important it is to increase non-oil proceeds to Nigeria’s inflow of foreign currency. Emefiele insists there is a good reason behind the CBN’s redesign of three different denominations of Nigerian banknotes.
Governor Emefiele projects that the inflation rate will remain elevated and above the 12.5% growth-aiding threshold.
“We will maintain the current tight monetary policy stance in the near term, especially in view of rising inflation expectations and exchange market pressures,” said Emefiele.
He projected that the GDP growth rate will remain positive in the remaining quarter of 2022 and during 2023. Emefiele said the monetary policy will remain focused on the objectives of price, monetary, and exchange rate stability.
On economic growth in 2023, the CBN Governor, said: “Based on the expectation of a robust non-oil performance, and barring any unforeseen shocks, GDP growth rate is projected to remain positive in the remaining quarter of 2022 and during 2023. The performance of the non-oil sector will be buoyed by the continued efforts at entrenching indigenous productivity in high-impact real sector activities.
“Domestic aggregate demand is further expected to be bolstered by the anticipated budgetary outlay and the surge of electioneering spending in the next few months.”
While appealing to Nigerians to embrace the new naira notes, Emefiele said that the naira redesign policy is aimed at achieving specific purposes including curbing the upward inflationary trend in the country.
He said: “This policy will quicken the attainment of a cashless economy as it is complemented by increased minting of our eNaira. It will curtail currency outside the banking system and, as monetary policy becomes more efficacious, help to rein in inflation.
“Based on the ever-escalating challenges that are inundating currency management in Nigeria, with grim consequences for our sovereign integrity, the CBN recently announced its policy to issue newly redesigned Nigerian banknotes.
“Analysis of the key challenges primarily indicated a significant hoarding of banknotes, as over 85 percent of currency in circulation were held outside the banking system.
“Whilst the global best practice is to undertake currency redesign every 5–8 years, our existing banknotes have remained unchanged in almost two decades.
“It is therefore no longer tenable to continue with business as usual; especially given the continually evolving circumstances that could impinge the optimal performance of the Naira.”