*Emefiele Explains Decline in GDP, Sluggish Production Dynamics, Unemployment Rate
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has disclosed that the impact of the Covid-19 pandemic on the economy, increased inflationary pressure, restrictions in international trade were some of the factors that informed the reduction of the Monetary Policy Rate (MPR) from 13.50% to 12.50%.
Governor, CBN, Godwin Emefiele, disclosed this while reading a communique at the end of the MPC meeting on Thursday in Abuja.
“The pandemic induced economic shock is mainly characterized by disruptions to the global supply chain, on account of the mitigating measures including lockdowns, travel bans, and quarantines put in place by various governments to contain the spread of the disease. The effects on the global economy have been unprecedented and indeed severe. These include significant stock market crashes; exchange rate volatilities; rising corporate and public debt; rising levels of unemployment; tightening financial conditions; capital flow reversals; and negative shocks to commodity prices, to mention a few,” Emefiele stated.
He highlighted the decline in the nation’s GDP as well as the decline in the manufacturing and non-manufacturing purchasing index which were attributable to slower growth in production, rate of unemployment, amongst others.
On reopening of the economy, Emefiele emphasized the need for Government to work towards a gradual reopening in line with recommendations of the Presidential Task Force (PTF) and advice from medical experts, insisting that efforts must be directed at saving not only lives but also livelihoods.
“This is to enable the resumption of economic activities necessary to stimulate growth, accelerate the pace of recovery, and restore livelihoods, particularly the vulnerable in our society.
“With respect to output, the Committee urged the Federal Government to continue exploring options of partnership with the private sector to fund investment in infrastructure. This would aid employment generation, support production, and boost output growth,” the communique stated
Meanwhile, other parameters such as the Cash Reserve Ratio (CRR) remained at 27.5%, Liquidity Ratio at 30%.
