The Senate on Tuesday approved the nomination of Dr Joseph Nnanna as Deputy Governor of Central Bank of Nigeria (CBN).
Nnanna’s confirmation followed consideration of the report on his screening by the Senate’s Joint Committee on Banking, Insurance and other Financial Institutions.
The committee had in its report, described Nnanna as a vibrant economist, who convinced members of the screening committee of his capacity to assume the position.
Announcing the confirmation, President of The Senate, David Mark, congratulated Nnanna on behalf of the lawmakers, and expressed optimism that the CBN would play a prominent role in the resolution of the current economic situation of the country.
He encouraged the apex bank to work assiduously in tackling the effect of the declining price of crude oil in the international market, on the nation’s economy.
News Agency of Nigeria (NAN) reports that answering questions from the lawmakers shortly before his confirmation, Nnanna said that one of the ways to tackle the current economic crisis was to recapitalise development banks.
“My take is that since we have development banks like the Bank of Industry (BOI), NEXIM Bank, Bank of Agriculture, and so on, we can recapitalise all of them.
“We can then mandate them to lend at a fixed interest rate to entrepreneurs and other investors willing to invest in Nigeria’s economy.
“If we recapitalise the BOI and we tell the Managing Director that we are giving him this money, and ask him to lend at a specific interest rate, he will oblige us because it is the tax payers money.
“We cannot force the management of a private-commissioned bank to lend at a fixed rate.
“This is because they will take into consideration, the risk premium especially when most people borrow without the intention of repayment,’’ he said.
He also noted that the non-performing loans in the country were very high and that banks’ balance sheets were landing on the loans.
He said that the nation had gone beyond the era of fixed interest rate.
According to Nnana, the issue of interest rate and exchange rate administration calls for sober reflection.
‘’We just have to make up our minds as a nation on what we really need, bearing in mind that we cannot have the three things together.
“We cannot have a low interest rate, low inflation and strong currency at the same time. It is when we make up our mind that the CBN will pursue the policy for us; it is a delicate balancing act.
“We should appreciate the difficulty in which we found ourselves. Since 1973, our economy has become dysfunctional because everybody depends on the oil sector.
‘’Our manufacturing sector is not real because we merely assemble products,” he said.
He also stressed the need for policy makers to be very careful while “navigating the unholy trinity that is the relationship between interest rates, exchange rate and inflation.”
