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CBN will discontinue quasi-fiscal interventions in the Nigerian economy  

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The CBN will no longer intervene in the Nigerian economy through quasi-fiscal activities but rather focus on its core monetary policy mandate.

This was one of the highlights of the keynote address by the CBN Governor, Yemi Cardoso at the 58th Annual Dinner of the Chartered Institute of Bankers of Nigeria.  

Cardoso noted that some of the previous failures of the CBN were tied to quasi-fiscal activities under the foray of “development finance activities.”

He also noted that through these activities, the CBN directly pumped over N10 trillion into the economy.  

During his address, Cardoso identified a plethora of factors that affected the effectiveness of the CBN under his predecessor, Godwin Emefiele.  

He noted that the CBN would be backtracking from these activities to focus on its primary mandate as the bank aims to contribute to Nigeria’s macroeconomic stability. 

He added,

Quasi-fiscal activities are activities carried out by government-related institutions that have fiscal implications to those of government actions yet are not included in the fiscal budget.

Essentially, these activities often involve interventions or operations that have an impact on the economy or public finances but are conducted outside the regular government budgetary process.  

For the Central Bank, quasi-fiscal activities typically involve taking actions that affect public finances such as targeted lending and participating in activities beyond its traditional monetary policy mandate.

During Godwin’s Emefiele time as the CBN governor, the apex bank developed a reputation for carrying out these activities, especially around the agriculture sector.  

Some of the quasi-fiscal activities carried out by the CBN under Emefiele include the Anchor Borrowers Programme, which was a lending programme targeted at farmers.

In 2022 alone, the CBN gave out about N629 billion to farmers under the Anchor Borrowers Programme.

However, reports emerged that loan defaults were threatening the success of the program.   

Another noteworthy quasi-fiscal activity undertaken by the CBN was a N1 trillion loan facility for manufacturers instituted by the CBN in April 2020.  

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