‘Reduce The Amount You Share’, CBN Tells Govt.
After a long politically motivated break, the Monetary Policy Committee of the Central Bank of Nigeria met on Tuesday and Wednesday.
Besides leaving the benchmark interest rate at 14%, it also discussed the trend of federal allocations.
The CBN governor, Godwin Emefiele told reporters after the meeting that the MPC believes the federal government should soft-pedal on the volume of cash it shares to the three tiers of government.
The MPC said there is need for “strong stabilisation programmes to freeze the growth in aggregate expenditure”.
Emefiele, said the committee called on the Federation Account Allocation Committee to create savings needed to stabilise the economy against future oil price-related shocks.
“The Monetary Policy Committee observed increasing monetisation of oil proceeds as evident in the growing FAAC distributions relative to the 2017 level of disbursement,” Emefiele said.
According to him, “The committee urged the government to initiate strong stabilisation programmes and to freeze the growth in its aggregate expenditure and FAAC distributions in order to create savings needed to stabilise the economy against future oil price-related shocks.”
The committee also called on the National Assembly to speedily pass the 2018 budget.
The MPC resolved that a quick passage of the 2018 budget would keep the fiscal policy on track and deliver the urgently needed reliefs in terms of employment and human capital development.
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