The Governor of Central Bank Nigeria (CBN), Godwin Emefiele, has said that Nigeria’s economy could slip back into a ‘protracted recession’ if all necessary fiscal steps are not ‘activated immediately’ to sustain the positive growth recorded in recent times.
He warned that although the country experienced positive economic growth in the second quarter of 2017, the economy is still “very fragile.”
The warnings were part of the communiqué read by Emefiele on behalf of other eight members that attended the two-day Monetary Policy Committee meeting of the bank that ended yesterday.
According to him, “the government needs to move quickly to start capital expenditure spending as contained in the 2017 budget as a way of reflating the economy in a way that will impact Nigerians, particularly those at the lower levels.”
Emefiele also warned against the rising fiscal deficit of President Muhammadu Buhari’s administration, recorded at 2.51% in the first half of the current year.
He further raised the alarm at the high government indebtedness and rapid domestic borrowings as net credit to the government posted 5.91% increase on annualised basis.
On July 25, six out of eight members of the Monetary Policy Committee that attended the Monday and Tuesday meeting voted to keep all rates indices unchanged.
The remaining two members, however, voted for a cut in headline interest rate from its current 14%. The committee comprises of 12 members in total.
The CBN governor explained that members who considered leaving the policy interest rate unchanged were also informed of the yet strong effect of inflation in the local economy.