21 February 2014

Nigeria: Okonjo-Iweala Allays Fear of Negative Impact On Economy

Photo: Leadership
Lamido Sanusi

The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has assured Nigerians and the international community that the federal government would remain resolute in the management of the nation's economy despite the suspension of Sanusi.

The minister, reacting to the suspension of the central bank governor, told reporters in Abuja that the pursuit of macro-economic stability, which has become the hallmark of the incumbent administration would continue.

She also expressed optimism that the tight monetary policy which the CBN has been driving would be sustained.

She said: "But I just wanted to use this opportunity to assure the market participants of the resolute attention that this government will be paying to managing the economy. Our objective remains to maintain macro-economic stability. That has been the hallmark of this government and of this administration. It is the macro-economic stability we maintained that has enabled us to continue to transform the different sectors of the economy, and that will not change. We will maintain tight fiscal policy. We expect a continuation of the tight monetary policy that has been on at the central bank.

We expect that this would continue because the new acting Governor, Dr. Sarah Alade, is the Deputy Governor for Policy, you will all recall. So, she has been a very strong part of the policy that the former Governor, Lamido Sanusi Lamido, has been implementing. With continued tight fiscal and monetary policies, the stability that has been the bedrock of the economy will be maintained.

"So we urge market participants to go back to business. We hope that the stability of the naira will be there and we will be able to manage the situation, going forward. That's what I want to assure people; that there will be no change in the policy stance of the government concerning the economy. The tight fiscal and monetary policies will continue. Let me just add that we are still in a good shape. Inflation is still at a single digit of about 8 per cent, our external reserves are at $41.4 billion."

According to the minister, the positions of those who assess the health of the nation's external reserves and the economy generally, including the International Monetary Fund (IMF), are that the economy is still in good shape in spite of the challenges.

She added that the fiscal deficit remains tight at 1.9 per cent of Gross Domestic Product (GDP) and it would remain the same this year and would not go up. Also, she said the country still has a current account surplus, noting that these factors combine to showcase a stable economy.

Although the news of Sanusi's suspension led to a fluctuation in the market with the naira depreciating, she said a continuation of the tight monetary of the CBN as well as the government's fiscal policies would continue and engender a stable currency.

According to her, Alade was the longest deputy governor of the apex bank, who was part and parcel of the policy thrust of the bank, and was not expected to deviate from the path of tight monetary policy which has been in place for since.

On whether political motives would not be imputed into why Sanusi was axed, the minister said: "I think it is the president's prerogative... He is running the Nigerian government... "

On the submission of the name of Emefiele to the Senate as a nominee to replace Sanusi, the minister said: "We should wait for the Senate. The Senate is the one that confirms the governor. And let's wait for the president to pronounce. But we have confidence that whoever the new governor will be... he will bring stability to the market."

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