13 February 2014, Lagos – Central Bank of Nigeria, CBN governor, Mallam Sanusi Lamido Sanusi has identified oil theft and increasing government spending as the greatest challenges facing the Nigerian economy.
He stated this while delivering a keynote address at the Udo Udoma and Bello Osagie 30th anniversary lecture in Lagos.
He said that the situation where some people successfully steal crude oil, refine and ship outside the country, and the fact that government spending is on a continuous upward trend, will continue to make it impossible for the economy to move at the desired rate.
“We have a problem that is entirely home grown. Oil theft, increase in government spending are greatest challenges of the economy. And people who are investing in our markets are watching and when there is little panic, the economy may collapse. So we cannot take the stability that we currently have for granted. We should stop oil theft, leakage and build our reserves,” he said.
The CBN governor, who used the opportunity to recount the efforts the apex bank has made under his leadership, noted that the bank’s monetary policies have made tremendous impacts on the exchange rates, especially in defence of the nation’s currency.
According to him, “The CBN is not looking for strong or weak naira. We are instead, looking for a stable currency. This is because we understand how a weak currency impacts the lives of ordinary Nigerians. Our biggest problem remains the threat to the exchange rate, because we should be resisting appreciation and not fighting depreciation as currently is the reality.”
Sanusi, who disclosed that the cost of managing the currency has dropped from N39 billion in 2009 to N34 billion in 2013, lamented the acute inefficiency in the value chain and explained that Nigeria needs to improve on that to drive the economy and make the banking industry lend more to the sector.
“We have moved agriculture lending from 0 to 4 percent in two years and today, Nigerian banks have up to N500 billion in agriculture. This is because we can abuse the banks from now till tomorrow or employ all sorts of tricks to get the banks to lend to agriculture and they will not. So sometime ago, we invited Standard Chartered from Kenya and Standard Bank from South Africa to come and explain to us how their banks are lending to the agriculture sector and they said that the whole issue revolves around value chain, which is actually the answer to the problem of the entire economy.