The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has said that Nigeria’s economy is plagued by contracting output and negative growth.
Emefiele said this at the Monetary Policy Meeting (MPC) held in Abuja on Tuesday.
He said that the country’s economy was slowed by stagflation – when inflation rises and GDP output contracts.
The CBN governor noted that policymakers in the country would continue to have an optimistic outlook on the growth trajectory of Nigeria’s economy.
He said, “Nigeria is one country that is in a situation that is out of the ordinary. Out of the ordinary because we find Nigeria being one country that is challenged by stagflation.
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“Stagflation is a situation where inflation is high, prices are running high and at the same time, output growth, in this case the GDP, is contracting and if you understand how this works, you would know that as an MPC, your core responsibility is to rein in inflation by ensuring that you keep the price and monetary stability mandate.”
Proffering a turnaround solution to the country’s shrinking economy, Emefiele said that the needed steps to be taken include”easing and injecting liquidity” into the economy.
He said, “On the other hand, the economy is confronted by a contracting output, where growth is negative. The normal way to recover from a contracting economy is by easing and injecting liquidity into the economy to stimulate consumption and investments and increase government expenditure.
“We are in a situation in which the objectives or goals are moving in opposite directions. What do we do? We will remain, as much as possible, pro-growth but at the same time, we will keep our eyes on whatever can be done to rein in inflation.”
