In a candid assessment of Nigeria's economic situation, Hon. Mohammed Bello El-Rufai, Chairman of the House Committee on Banking Regulations, delivered opening remarks at a statutory briefing with the Central Bank of Nigeria (CBN) on October 15, 2024. The session brought together key stakeholders, including the CBN Governor, Deputy Governors, committee members, and other officials, to discuss the nation's monetary policy amid challenging economic conditions.
El-Rufai began by commending the CBN's leadership for its relentless efforts in implementing policies designed to stabilize the economy. He noted that, since the Governor took office in September 2023, the CBN has taken bold steps to enhance market transparency, improve financial stability, foster a secure investment environment, and transition towards a market-driven exchange rate system. These efforts included the unification of the foreign exchange market, which helped clear a $7 billion backlog of forex demands, significantly reduced volatility, and increased the nation's external reserves.
However, despite these measures, El-Rufai emphasized that the economic realities on the ground remain dire. The inflation rate stands stubbornly at 27%, one of the highest levels in nearly two decades. This has been exacerbated by the recent increase in the Monetary Policy Rate (MPR) to a historic 27.25%, which, rather than stimulating growth, has made borrowing prohibitively expensive for individuals and businesses. "The high cost of credit is stifling economic activities and pushing businesses to the brink," he remarked, noting that the current monetary environment has made it nearly impossible for many Nigerians to access loans.
The Chairman further acknowledged the CBN's efforts in the exchange rate management, particularly the unification of the foreign exchange market. This move, which was aimed at enhancing liquidity and reducing market distortions, saw the clearing of a significant backlog in valid forex requests. Yet, despite these accomplishments, the naira continues to struggle, depreciating to N1,590 to the US dollar, further straining the purchasing power of ordinary Nigerians. "For a country that depends heavily on imports, this situation is not merely inconvenient—it is catastrophic," El-Rufai said, pointing out that the impact on the cost of living has been severe.
Drawing attention to the troubling trend in unemployment, he revealed that the jobless rate increased by 5.3% in the first quarter of 2024 alone, with many businesses forced to downsize due to the unfriendly monetary environment and unstable exchange rate regime. He questioned whether the CBN's policies, aimed at curbing inflation and stabilizing the naira, might be inadvertently worsening the economic outlook, as the general populace continues to face escalating living costs.
El-Rufai also addressed the nation's spiraling debt profile, which has surpassed N129 trillion following a recent $6.45 billion loan from the World Bank. He expressed concern over Nigeria's growing dependency on external borrowing, especially at a time when inflation is surging, and the naira is weakening. "We are entering a vicious cycle of borrowing to cover deficits, which only fuels further inflation," he warned. He called on the CBN to take urgent steps to arrest this cycle before it becomes unsustainable.
To illustrate the harsh economic realities, he compared the prices of basic goods over the past year. "When you took office in September 2023," he reminded the CBN Governor, "a loaf of bread cost around N500, a mudu of garri was N300, a 50 kg bag of rice was priced at N36,000, and a mudu of sugar was N700. Today, those prices have more than tripled. A loaf of bread now costs N1,800, a mudu of garri is N1,200, a 50 kg bag of rice exceeds N100,000, and a mudu of sugar is N3,000." He posed a critical question: "Will Nigerians be able to afford a bag of rice for less than N50,000 in the next six months?"
The lawmaker emphasized the urgent need for measures that would bring immediate relief to Nigerians, particularly in his constituency, Kaduna North, and across the country. "The people want to know: Is there any light at the end of this very dark tunnel?" he asked, echoing the growing sentiment of frustration among citizens who are grappling with rising costs and dwindling purchasing power.
In his remarks, El-Rufai also highlighted the recent economic stabilization efforts by the federal government. He noted that President Bola Ahmed Tinubu had recently transmitted four Economic Stabilization Bills to the National Assembly, aimed at addressing the economic challenges. "I believe the CBN had some input or was consulted in drafting these bills," he said, urging the Governor to shed light on how the proposed legislation would help alleviate the economic burdens faced by ordinary Nigerians, including small traders, taxi drivers, and the unemployed youth.
He concluded by calling on all stakeholders present to engage in constructive dialogue, with the shared goal of improving Nigeria's monetary policy framework. "We must work together to find solutions that not only address the current economic woes but also lay the foundation for sustainable growth," El-Rufai emphasized, urging the CBN to adopt a more balanced approach that considers both monetary tightening and growth stimulation.
The session served as a critical forum for lawmakers and central bank officials to confront the stark realities of the economy, with El-Rufai’s remarks setting the tone for an urgent reassessment of policies to stabilize the nation's economic trajectory.
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