Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has stated that Nigeria’s economy is now suffering as a result of the previous government’s wasteful N27 trillion Ways and Means advance and N10 trillion intervention.
He said that the initiatives caused higher inflation and interest rates.
Cardoso revealed this on Thursday while speaking at a CEO Forum in Lagos.
He said that the country’s high interest rate, which stood at 26.25 percent in May, is caused by rising money supply and associated inflation, forcing the Monetary Policy Committee (MPC) to keep rates up.
He dissociated himself from the MPC’s decision to strengthen monetary policy measures.
According to him, Nigerians must recognise that the increase in Ways and Means and intervention programmes has implications.
Cardoso also stated that the MPC’s principal objective is to minimise inflation, and that its choices are based on statistical trends rather than feelings.
Cardoso said:
“Interest rate is not set by the governor of the Central Bank. The interest rate is set by the members of the monetary policy committee.
“Thankfully, we have a monetary policy committee comprised of independent-minded people who are solely driven by data.
“The MPC has made it very clear that for them the major issue is taming inflation and has also made it very clear that they will do whatever is necessary to tame inflation.
“Sadly, we have a situation where a lot of money supply went into the system. We all saw ways and means soared to N27 trillion. We saw interventions of N10.5 trillion. It has its consequences. In large respect, that is what we are paying for now.”
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