Central Bank of Nigeria (CBN) Calls for Collaboration Between Fiscal and Monetary Sectors to Boost Economic Growth

The Central Bank of Nigeria (CBN) has emphasized the need for closer collaboration between the fiscal and monetary sectors in order to expedite economic growth and maintain stable prices. 

Speaking at the Fiscal Liquidity Assessment Committee (FLAC) Retreat in Abuja, Dr Kingsley Obiora, Deputy Governor of the CBN, highlighted the importance of improved cooperation between these two sectors. 

The retreat, centered around the theme of "Post-Pandemic Fiscal Stress and Monetary Policy Management in the digital age," aimed to address the challenges faced by the country in the wake of the COVID-19 pandemic.

Dr Obiora explained that FLAC was established by the CBN to enhance the level of coordination between fiscal and monetary policies. 

The economic strain experienced by Nigeria due to reduced revenue and increased expenditures further underscores the need for this cooperation. He noted that the pandemic initially began as a health crisis but quickly evolved into an economic crisis, negatively impacting people's lives and livelihoods. 

In response, the Federal Government implemented the Economic Sustainability Plan.

Dr Hassan Mahmud, Director of the Monetary Policy Department at the CBN, emphasized that FLAC serves as a strategic committee that facilitates interaction between monetary and fiscal authorities. 

He stressed the importance of convening the committee to develop strategic responses to liquidity challenges arising from both global and domestic issues. Mahmud acknowledged the prevailing headwinds faced by Nigeria, including rising consumer prices, high public debt, declining revenues, and weak economic recovery. 

Consequently, he called for innovative and strategic measures to address these challenges.

The CBN will continue to implement various "quasi-fiscal" measures to support the Federal Government's management of the overall economy. The retreat's theme underscores the need to reassess the existing macroeconomic policy mix and its efficacy in the context of the ongoing digital transformation. 

Malam Aliu Ahmed, the Permanent Secretary of the Federal Ministry of Finance, Budget, and National Planning, commended the enduring partnership between the CBN and the fiscal authority, particularly during the pandemic. 

Ahmed highlighted the CBN's significant stimulus program and interventions in critical sectors of the economy to support growth and development. The swift and sustained policy support contributed to the gradual resumption of economic activities and positive growth trends.