CBN forecasts 3% GDP growth, to mop up mutilated banknotes

The Central Bank of Nigeria said contrary to the prediction of Nigeria Governors’ Forum that the country could go into recession in 2020, the country would grow at three per cent.

The Deputy Governor, Financial System Stability, CBN, Dr Joseph Nnanna, said this while representing the Governor of the apex bank, Mr Godwin Emefiele, at the presentation of the 2019 Regional Economic Outlook by the International Monetary Bank.

At the forum, the Permanent Secretary, Special Duties, Ministry of Finance, Dr Mohammed Dikwa, said there was no plan by the government to control the country’s population, which the United Nations Fund for Population Activities put at 201 million on Sunday.

Nnanna said the country would likely grow at three per cent but added that the growth rate was not good enough because of the high population growth of 3.2 per cent.

He said, “Are we going to witness increased inflation or are we sliding back into recession? My answer is no. We are making smooth progress towards growth and by the end of 2019, all things being equal, we are likely going to have between 2.8 and three per cent Gross Domestic Product growth rate.

“But is that adequate? My answer is no. Three per cent GDP real growth rate is not enough for Nigeria where our population growth rate is 3.2 per cent. So, per capita growth rate is still negative, but definitely, we are not going through the era of 2016 when we had a recession. That won’t happen. Hopefully, not under the CBN’s watch.

“We will grow, unlike in 2016 when we slid into recession. We are going to maintain the policy interest rate in real terms.”

Dikwa, on the other hand, said there was no immediate plan to control the population of the country.

He said, “As of now, the government is not even sure to make any policy to control population growth. We won’t have much problem with the population growth for now; but if the need be, the government has every right to look into it and make consultations for us, including state governments, on what to do.”

In a similar development, the CBN revealed its plans to withdraw naira notes deemed unfit for use from circulation.

Emefiele disclosed this during the unveiling event of the Clean Notes Policy and Banknotes Fitness Guidelines in Lagos.

He said, “The CBN also intends to embark on a project that will enable the mop up of the mutilated banknotes from circulation. Furthermore, the bank will continue to embark on sustainable institutional reforms and enact policies that will promote efficient currency management in Nigeria.”

Emefiele, who was represented by the Deputy Governor, Operations Directorate, CBN, Mr Adebisi Shonubi, described currency management as vital to people’s daily lives, saying despite the improvements in the electronic payments system, banknotes remained predominant for the payment and settlement of commercial transactions in Nigeria.

The CBN boss urged Nigerians to handle the naira banknotes properly as it was a criminal offence to abuse the naira.

According to him, some policy measures are being pursued by the CBN towards promoting effective and efficient currency management in Nigeria.

He said the CBN had registered eight companies to carry out cash-in-transit and two cash processing companies to operate in Nigeria.

Emefiele said, “The CBN has also put in place strategies to enable the direct disbursement of lower banknotes to various market associations and merchants through their respective Deposit Money Banks.

“The intervention commenced in Abuja and has been extended to Lagos, Kano, Enugu, Umuahia, Yola, Jos, Gombe, Asaba, Ibadan, Kastina, Uyo, Minna and Port Harcourt.”

He added that the apex bank would continue to sustain its engagement with key stakeholders to enable it to gain insight into the various challenges that end-users faced while processing the banknotes. – Punch

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