The Central Bank of Nigeria (CBN) has called for increased cooperation between the fiscal and monetary sectors of the economy to accelerate economic growth and price stability.
Dr Kingsley Obiora, Deputy Governor, Economic Policy of the CBN said this on Thursday in Abuja, in his opening remarks at the Fiscal Liquidity Assessment Committee (FLAC) Retreat.
BRANDPOWER reports that the theme of the retreat was “Post-Pandemic Fiscal Stress and Monetary Policy Management in the digital age.
According to Obiora, FLAC is a committee that the CBN created to improve the level of cooperation between fiscal and monetary arms of economic policy.
He said that the fiscal stress experienced by the country as a result of dwindling revenue and rising expenditure also makes a case for such cooperation.
“Before the COVID-19 pandemic we were already in some economic difficulty.
“The pandemic started as a health crisis but quickly metamorphosed into an economic crisis. It was affecting the lives and livelihood of people,” he said.
He said that the Federal Government did the Economic Sustainability Plan that responded to the pandemic.
He said that the monetary authorities always reacted to what fiscal authorities did, thereby necessitating strong cooperation between both authorities.
According to Dr Hassan Mahmud, Director, Monetary Policy Department at the CBN, FLAC is a strategic committee of the apex bank which provides avenue for monetary and fiscal authorities to interact.
MahMud said that it was important to bring all agencies of the committee together to provide strategic responses to addressing liquidity challenges in the face of emerging global and domestic issues.
“It is noteworthy that this gathering is at a time when the country is contending with several headwinds, including rising consumer prices, high public debt, dwindling revenues and weak economic recovery.
“These challenges require innovative and strategic responses to address them, ” he said.
He said that the CBN would continue to implement various “quasi-fiscal” measures to support the Federal Government‘s effort to manage the general economy.
He said that the theme of the retreat highlighted the need for a reappraisal the prevailing macroeconomic policy mix and its effectiveness within the context of emerging digital transformation.
The Permanent Secretary of the Federal Ministry of Finance, Budget and National Planning, Malam Aliu Ahmed, commended the CBN for enduring partnership with the fiscal authority, especially during the pandemic.
Ahmed said that the apex bank responded to Covid-19 by embarking on a stimulus programme of unprecedented magnitude by intervening in critical sectors of the economy to support economic growth and development.
“The fiscal authority, on its part, implemented far-reaching expenditure measures to contain the adverse impact of the pandemic on citizens, particularly the poor and vulnerable and to resuscitate the economy,” he said.
He said that swift and sustained policy support led to the gradual resumption of many economic activities which saw growth rebound and sustained at positive territories.