Business Emefiele’s Crocodile Tears Over N300b Surplus



While Governor of the Central Bank of Nigeria, Dr. Godwin Emefiele condemned banks of not lending their excess N300bn to certain sectors of the country in order to develop the economy and make the Naira stronger, Daily Independent claims the problem stems from the Central bank itself.

According to the newspaper, Banks aren't lending to other sectors because they prefer to lend to the Central bank as it offers a better interest rate.

With another N866bn about to be injected into the economy - through redemption of AMCON's debts- the over N1000bn surplus will pitch so much more Naira against rationed dollar supplies in the forex market and this imbalance will according to Emefiele also “increase the pressure on the Naira Exchange rate.”

In other words, price stability, which is the core mandate of the CBN will become severely threatened when the economy is ‘cursed’ with so much excess liquidity.


In any event, we must wonder why, inspite of its adverse consequences to economic growth, the CBN would continue to pay double digit interest rates in order to sterilise surplus funds in the banks; it really should not require any persuasion for the CBN to adopt the current best practice of the European Central Bank which charges the domestic money deposit banks a token fee of 0.1 percent to warehouse surplus funds rather than pay any interest to the banks; unless of course, the CBN has committed to serving the needs of our oppressive oligarchs rather than the protection of the welfare of over 70 percent of Nigerians who earn less than $2 a day!

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