CBN: Unconventional monetary policies needed to grow and diversify the economy
by Titobioluwa OkunadeThe Central Bank of Nigeria (CBN) has disclosed that the need to grow and diversify the country’s economy led to the adoption of its unconventional monetary policy.
According to Nigerian Tribune, the CBN Deputy Governor, Corporate Services, Mr Edward Adamu, represented by the Director, Corporate Communications, CBN Mr. Isaac Okorafor, in his opening remarks at the just concluded 28th Seminar for Finance Correspondents and Business Editors, said in order to grow and diversify the economy, the government had to be innovative with its monetary policies as the conventional economic tools didn’t address factors limiting economic growth.
Meanwhile, some of the policies included encouraging local production by imposing high tariff and levies on imported goods, the increment of Loan to Deposit Ratio (LDR) of banks to 65%, thereby encouraging credit to key sectors of the economy.
“These unconventional monetary policy initiatives have been premised on ensuring credit delivery to critical sectors of the economy. This has informed the directive to Deposit Money Banks to maintain a minimum Loan to Deposit Ratio (LDR) of 65per cent by the end of December 2019.
“The Bank is also creating the necessary eco-system to inculcate a better credit culture among Nigerians. Though we adopted unconventional or heterodox monetary policies, they were, however, well thought through and have been yielding significant gains for the Nigerian economy,” Adamu said.
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Mr Adamu disclosed that CBN’s involvements had bolstered agricultural production by improving farmers’ access to the market, bridging the gap between agro-processors and industrial firms in the sourcing of raw materials. He added that there was ample evidence of noteworthy reductions in the country’s annual imports bill, and increased non-oil exports.
Mr Adamu disclosed that the CBN’s agricultural programme had supported more than 1.5 million farmers across all the 36 States of Nigeria, in cultivating 16 different commodities over 1.4 million hectares of farmland. It has also supported the creation of over 2.5 million jobs across the agricultural value chain.