CPPE Outlines Urgent Priorities For New CBN Governor

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Amidst the recent depreciation of the naira to N1,000 per dollar in the unofficial exchange market, the Centre for the Promotion of Private Enterprise (CPPE) has unveiled a crucial agenda for Dr. Olayemi Cardoso, the Acting Governor of the Central Bank of Nigeria (CBN). In a statement titled “10 Points Agenda for the CBN Governor,” issued by CPPE Founder Dr. Muda Yusuf, the organisation underscores the top priorities for Dr. Cardoso.

The 10-point agenda includes restoring confidence in the foreign exchange market, strengthening the financial system, enhancing its efficiency, addressing capital requirements for banks, tackling fiscal deficit financing, and abandoning the contentious naira redesign policy. Additionally, it touches upon the tenure and cost of funds in the banking sector, reducing risk concentration in the banking industry, fostering stakeholder engagement, and emphasising corporate governance.

Dr. Yusuf emphasised the critical nature of Dr. Cardoso’s tenure, given the ongoing confidence crisis in the foreign exchange market and economic challenges such as depreciating exchange rates, rising energy costs, inflationary pressures, and foreign exchange obligations. He urged transparent intervention in the foreign exchange market to minimise volatility and emphasised the need for a separate currency trading window within the banking system.

The CPPE also called for a recapitalisation of the banking industry due to the significant loss of value resulting from the naira’s depreciation in the foreign exchange market. Dr. Yusuf compared the minimum capital requirements for banks, highlighting the need for an updated recapitalisation exercise to maintain financial stability.

In addition, CPPE advised suspending the naira redesign policy; emphasising its lower priority in the current economic climate. The organisation called for deepening the financial intermediation role of deposit money banks to increase credit ratios to the private sector; addressing the high ratio of non-interest income, and reducing the gap between deposit and lending rates.

Dr. Yusuf also urged caution in the use of ways and means of financing for the government’s fiscal deficit; stressing the importance of adhering to statutory limits to avoid adverse effects on the macroeconomic environment.

 

 

 

 

 

 

 

 

 

 

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