Traditionally, the Central Bank of Nigeria (CBN) is primarily responsible for the monetary policies of the government. Intervening in the fiscal policies of government has however grown significantly under Godwin Emefiele as governor of the CBN. According to Dr Law Mefor, economic interventionism is an effort taken by the government through its agencies such as the CBN to influence the nation’s economy. This assumes that the state and its economy are inherently separate from each other.
There is a consensus that central banks, particularly in developing economies, have to develop policies not only to address price stability, but also to have a major role in the political, institutional and economic environment. It was on this premise that the governor of CBN in his maiden speech, noted that the Bank would pursue both price and financial system stability as well as provide complementary developmental functions by creating an environment for Nigerians to live better and more fulfilled lives. This is why CBN pursues policies to enhance both economic growth and development emphasizing inclusivity. The idea has been that the Central Bank will not stand by while the economy takes a downward turn.
The broad policy deliverables of the CBN economic interventions under Emefiele can be categorised as follows: improving access to affordable finance to promote long-term investment in the real sector, diversifying the economy, job creation, and promoting inclusive growth.
Though these interventions are in almost all aspects of the Nigerian economy, the agricultural sector has been a major focus of the interventions of the Central Bank of Nigeria since the 1970s. The interventions, which are driven by the development finance mission of the apex bank, are motivated by the recognition of the critical roles agriculture plays in economic growth and development. The CBN would want to see Nigeria return to agriculture as its economic mainstay.
Nigerian economy has suffered at least two great shocks in the last decade. The first was the global economic meltdown that soon induced global economic recessions, which Nigeria tried to stave but recession eventually featured in Nigeria in 2016. With several CBN interventions, the nation was able to snap off the first and second recessions in record times.
The second shock the Nigerian economy suffered came with the COVID-19 pandemic, which resulted in yet another meltdown of many countries’ economies. Again, with the strong interventions of the CBN, the Nigerian economy was able to survive with very minimal consequences compared to most economies. Growing the Nigerian economy to ensure both growth and development requires inclusive economic policies to carry all segments of the nation along and ensure prosperity for all. This is essentially the intendment of CBN economic interventions.
The concern of CBN is that experience has shown that it is possible to have economic growth without development. That is, an increase in GDP, yet most people do not see any actual improvements in their living standards. This often occurs when economic growth only benefits a small percentage of the population.
CBN under Emefiele understands this and has come up with economic interventions targeting certain weak segments of the society and helping to escape the grinding poverty belt by giving them resources to be gainfully employed.
Inclusive growth, coupled with equal opportunities, consists of economic, social and institutional dimensions. It includes gender equality, meaningful employment, inequality, welfare and improvements in education.
Inclusive growth is a holistic view of how people’s lives improve and ensures economic growth that is distributed fairly across society and creates opportunities for all. This summarizes the goal of the economic interventions of the CBN under Emefiele.
Economic development is the growth of the standard of living of a nation’s people from a low-income (poor) economy to a high-income (rich) economy as seen in the CBN interventions. The outcomes of these CBN interventions are debunking the misguided notion that economic redistribution tends to slow or reverse overall economic growth. It enhances it as shown in the thousands lifted out of poverty by the CBN in the last couple of years.
Inclusive growth implies direct links between the macroeconomic and microeconomic determinants of the economy and economic growth.
The microeconomic dimension captures the importance of structural transformation for economic diversification and competition, while the macro dimension is about changes in economic aggregates such as the country’s gross national product (GNP).
Emefiele has also argued here and there that sustainable economic growth requires inclusive growth while admitting that maintaining this is sometimes difficult because economic growth may give rise to negative externalities, such as a rise in corruption, which is a major problem in developing countries. Most government initiatives are reeking under the pervasive influences of corruption but the CBN is rising to that challenge by deploying counteractive policies such as automation, ICT and digital solutions.
CBN’s emphasis on inclusiveness – especially on equality of opportunity in terms of access to microloans, resources, and an unbiased regulatory environment – has been an essential ingredient of the growth and development recorded under the Buhari government. CBN’s inclusive growth approach takes a longer-term perspective, as the focus is on productive employment as a means of increasing the incomes of poor and excluded groups and raising their standards of living.
As a humanist, Emefiele himself knows that in real life, growth without development will deepen inequality and have dangerous socio-political consequences that could undermine the very essence of freedom and democracy while precipitating insecurity and youth restiveness. India is an example of a nation that has relentlessly pursued inclusive economic policies, growth and development. India attained this enviable status by pursuing growth and development together in order not to create worse forms of inequality. The Indian economy has grown at an average rate of 6.4% a year since 1992 and has digitally connected rural and urban India.
Nigeria needs to follow the example of India whose rural economy is already digitalized to achieve sustainable economic growth. Sustainable economic growth is not only about expanding national economies but also about ensuring that we reach the most vulnerable people of societies and that is the aim of the CBN interventions.
Targeting economic development, CBN interventions aim at increases in goods and services produced in the Nigerian economy as well as creating jobs while promoting growth to ensure development via both qualitative and quantitative growth of the economy. Thus the interventions are now producing wealthier, healthier, better employed and self-employed, self-reliant Nigerians by creating more and more opportunities in the sectors of education, healthcare, employment, and the conservation of the environment and increasing the per capita income of thousands of citizens who have benefitted from the apex bank’s interventions.
Through its wealth creation, empowerment and employment interventions in almost all aspects of the Nigerian economy have benefitted. The interventions have ensured safe drinking water, improved sanitation systems, medical facilities, the spread of primary education to improve literacy rate, eradication of poverty, improved transportation, increase in employment opportunities, etcetera.
Economic development is considered a multidimensional phenomenon because it focuses on the income of the people and the improvement of the living standards of the people of the country. CBN interventions target improvements in life expectancy rate, infant, literacy rate, poverty rates, and mortality rate to bring quantitative and qualitative impacts on the citizens and economy.
It is also safe to say that economic growth is a subset of economic development or the latter’s starting point. But until economic growth transforms into economic development, it remains pervasive and antithetical to national health. In other words, economic growth is essential but must be a condition precedent to economic development. That is essentially what CBN economic interventions under Godwin Emefiele have demonstrated.