Sango-Ota (Ogun) – Dr Titus Okunronmu, a former Director, Budgetary Department, Central Bank of Nigeria (CBN), says there is the need to combine both fiscal and monetary policies in order to achieve sustainable economic growth in the country.
Okunronmu said this in an interview with the News Agency of Nigeria (NAN) in Ota, Ogun on Wednesday, while reacting to the outcome of the Monetary Policy Committee (MPC).
NAN reports that the CBN Governor, Dr Godwin Emefiele, had on Tuesday in Abuja announced the retention of interest rate at 14 per cent, Cash Reserve Ratio at 22.5 per cent and Liquidity Ratio at 30 per cent.
According to Okunronmu, retaining all the key monetary policies is not sufficient to attain sustainable economic development.
“Monetary policies alone cannot work, we need to combine fiscal policies before we can know the direction of the economy.
“The MPC also need to think in the direction of combining the fiscal policies and monetary policies so as to achieve a desirable result,’’ he said.
The former CBN director, however, noted that the retention of the interest rate at 14 per cent was a good decision, adding that the interest rate could not be lowered than the current inflation rate which was put at 12.48 per cent by the National Bureau of Statistics (NBS).
According to him, if people borrow money when inflation is higher than interest rate, the people or investors will be at a loss.
Okunronmu also advised the Federal Government to revamp the four nation’s refineries so that refined products could be selling across the West African countries.
He said that the ability of the government to effectively do this would stabilise the nation’s currency as well as generate foreign exchange.