Asset management group, United Capital Group, has expressed support for the decision of the Central Bank of Nigeria to collaborate with stakeholders on future intervention programmes.
The firm stated this in a flash note it published following an interview of the CBN Governor, Dr Olayemi Cardoso, with Arise TV on Monday.
The CBN governor stated that future interventions of the apex bank would involve stakeholders and players with proven experience.
“Deciding to collaborate with stakeholders represents a prudent and forward-thinking approach. This initiative will not only promote inclusivity within the market but also strengthen confidence in the economy. As stakeholders offer valuable insights to decision-makers, it fosters an environment where diverse perspectives contribute to informed decisions,” United Capital noted.
It also expressed an anticipation of a modest improvement in the valuation of the naira consequent on the effective implementation of the CBN’s reforms.
“However, we recognise that investor confidence in the economy remains low. Addressing this issue would likely lead to a consequent appreciation of the naira.
“Additionally, it is imperative for the country to enhance its production of crude oil and revitalise the non-oil sector to diversify its revenue sources, thereby strengthening the naira.
“We hold the belief that the CBN’s newly adopted communication strategy will play a pivotal role in educating the public about the rationale behind the apex bank’s decisions. Specifically, the effective communication of the Monetary Policy Committee’s decisions may shed light on the necessity for MPC to address inflationary pressures in the country,” the flash note said.
Cardoso noted that he was under no illusions that interventions were necessary in Nigeria given the landmass and population of the country.
He, however, stated that the country could no longer afford a failed intervention programme.
He said, “Interventions are not something that you can wish away but I think it is important that the framework is there to ensure that once you do it, it reaches the people it is meant to reach.
“There is no point in voting such a huge amount for an intervention when the farmer is not able to access it or he accesses it in a way that it is insufficient or doesn’t help him to achieve his objective.”
“Or the SMEs, who see it far away from them but you voted so much yet it doesn’t to them through distortions. Those are things that we want to be able to sit with as the central bank and use our convening power to bring people around the table and agree. It will not just be DFIs alone but other stakeholders as well and agree on a way forward.”
He added that rather than the central bank thinking and implementing intervention programmes, “We will be working closely with those whose core strength it is to encourage them and bring others to the table. They don’t have to be all local, internationally as well, who have had experiences elsewhere and it has worked.