Chief Economist at SPM Professionals, Paul Alaje, has urged the fiscal authorities to complement the Central Bank of Nigeria’s (CBN) efforts in stabilising the economy by ensuring prompt budget implementation and financing key sectors. Alaje made the call while reacting to the Monetary Policy Committee’s (MPC) decision to retain the Monetary Policy Rate (MPR) at 26.5 per cent at its meeting on Tuesday.
READ ALSO: CBN Retains Interest Rate At 26.5%, Raises Concerns Over Heightened ‘Global Uncertainties’ He described the decision to hold rates as significant, saying it would help promote stability by avoiding unnecessary uncertainty in the economy despite prevailing domestic and external risks.
“The decision MPC has taken today is really very significant… What they have not done is to cause uncertainty in the market,” he saidf. According to him, attention should now shift to the fiscal side of the economy, with government ensuring that approved budget releases are disbursed promptly to contractors so that public spending reaches the real sector.
“What we need to do right now at the fiscal side is to ensure that the approved budget releases go to contractors, and we look at financing the key sector.” The economic analyst also identified the energy sector, the Nigerian Railway Corporation and general infrastructure as some of the areas requiring sustained government financing, warning that delays in releasing budgeted funds would reduce the impact of government spending on the wider economy.
“Revenues must be given to contractors in these key sectors, without forgetting all other sectors, education and health. But the key one here is that releases must go to contractors because they are private sector people. That is how we can say that the impact of government spending reaches the people.
“When we budget, and the releases are not going to the people as and when due, you see that the impact will be worrisome, and we may have multiple budgets running at the same time.” He also advocated policies that encourage local production, arguing that Nigeria should develop industrial hubs with reliable electricity while strengthening collaboration between fiscal, monetary and trade authorities to drive long-term economic growth.
While maintaining that stability is necessary, Alaje said it should translate into tangible improvements in the lives of Nigerians. “Priority for us as a nation is stability. Stability itself is not a target. It is to make our nation prosperous. It is to make our people empowered.