The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has urged Federal Government to leverage on Public Private Partnership (PPP) to intensify investment in infrastructure to increase output and employment.
The CBN Governor, Mr Godwin Emefiele said this while reading the communique of the meeting during his national broadcast monitored by Nigeria News Agency in Abuja on Tuesday.
Also, MPC retains MPR at 13.5%, holds other policy parameters constant.
Emefiele said the committee noted that this was necessary owing to the persistence of inflationary pressures attributed to a combination of monetary and structural factors.
He said the MPC cited the potentials for Foreign Direct Investments (FDIs) flows to the Nigerian auto manufacturing, aviation and rail industries, which could take advantage of these viable and untapped domestic and regional markets.
Emefiele said the Committee, however, noted the sustained improvement in the financial soundness indicators and applauded the continued decline in the ratio of non-performing loans, growth in assets of the banking system and profitability of the industry in the light of increasing global uncertainties.
He stated that the MPC also recognised the success of the Bank’s loan-to-deposit ratio policy and its potential to alleviate production shortfalls, reduce unemployment and boost aggregate demand.
According to him, the committee urged the Bank to pursue this and other related policies to a conclusive end.
Meanwhile, the governor disclosed that the MPC underscored the COVID-19 pandemic as a public health crisis which would continue to undermine any monetary or fiscal stimulus unless appropriate measures were taken to trace, test, isolate and treat infected persons in order to curtail the spread.
He said the committee enjoined government to ensure that migration across the country was significantly reduced.
Emefiele said the MPC also called on the Federal Government to take necessary steps to safeguard the population through close monitoring and emergency readiness measures to identify and care for infected persons in the country.
He added that the safety measures should include compulsory restriction of movement to curtail spread of the pandemic.
“The Committee noted the weakened revenue position of the Federal Government arising from the sharp drop in oil prices.
“It reiterated the need for government to urgently reduce reliance on oil revenue by gradually diversifying the economy and improving tax collection.
“To this end, the MPC noted the speedy response of the Federal Government to the oil price shock by the revision of the 2020 budget downwards by N1.5 trillion and the oil price benchmark to 30 dollars per barrel.
“The MPC urged the National Assembly to fully cooperate with the Federal Government in coming up with a budget that reflects our new realities.
“In addition, the Committee noted the introduction of price modulation measures resulting in reduction in the pump price of PMS from N145 to N125 per litre.
“Emefiele said the Committee also noted its contributory effect in boosting aggregate demand, lowering inflation and improving the welfare of ordinary Nigerians,” he said.