A financial expert, Dr Uche Uwaleke, on Monday predicted that the easing of the monetary policy by Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) might be from March.
Uwaleke, the Head of Banking and Finance Department, Nasarawa State University, Keffi, told the News Agency of Nigeria (NAN) in Lagos that the MPC might signal easing the monetary policy in its second meeting in March.
“With the headline inflation gradually in retreat, I expect the MPC to signal the easing of monetary policy during their second meeting sometime in March 2018.
“This is with a view to complementing fiscal measures aimed at stimulating the economy, especially via the real sector.
“Although economic growth has turned positive after experiencing five quarters of negative growth in a row, the growth in national output is still weak and fragile being driven primarily by the oil sector,” he said.
Uwaleke said that apart from agriculture, critical sectors of the economy such as manufacturing, construction and transportation were still in the negative territory.
He said that an accommodating monetary policy could help these sectors out of the woods through a low bank lending rate environment that would facilitate access to cheaper credit facilities.
Uwaleke said that there would be jobs creation with lower bank lending rates and a more conducive climate for job creation.
He said the MPC should continue to be guided by the primary mandate of the CBN which centred on maintenance of price stability without undermining the need to support inclusive growth.
On the World Bank’s projection of 2.5 per cent Gross Domestic Product (GDP) growth rate for Nigeria, Uwaleke said the bank’s projection was more realistic than the 3.5 per cent target used for the 2018 budget.
He said that the steady recovery in crude oil price and output on account of the OPEC/Non-OPEC member countries output cut agreement and the relative peace in the Niger Delta region provided some assurance that the revenue targets in the 2018 budget would be largely met.
Uwaleke expressed fears that the delay in the passage of the budget, the cumbersome procurement process and the huge infrastructure deficit might affect the 3.5 per cent projection for GDP in the budget.
He said that the political temperature associated with election years might conspire against the high GDP growth levels projected in the 2018 budget.