Sanusi: Nigerian economy records mixed performance

Central Bank Governor Sanusi Lamido Sanusi yesterday told members of the Federal Executive Council that the nation’s economy has grown at the rate of 6.4 percent in the first two quarters of 2011 against the overall growth projection of 7.8 percent for this year, but noted that inflationary pressures still pose serious challenges to the economy. The Council also yesterday approved CBN’s proposal to use Lagos to test-run cash transaction limit policy, which it said would help reduce cost of running banks by 30 percent.

Information Minister Labaran Maku, who briefed newsmen shortly after the meeting presided over by President Goodluck Jonathan, said the CBN boss disclosed this while briefing the Council on the performance of the second quarter of the nation’s economy at the State House, Abuja.

He said CBN will test-run the cashless policy in Lagos, in partnership with the Governor Babatunde Fasola, adding that in few months, Lagos will move swiftly into e-banking “and there is also the initiative to introduce mobile banking across the country so that with our telecoms we can use them to open our bank account, transfer money, receive payment or withdrawals.”

He said Sanusi identified high lending interest rates, low credit flows to the core private sector and sustained pressure in the foreign exchange as some of the variable crippling the speedy growth of the economy.

He also identified low accreditation to reserves, fluctuating interbank interest, huge fiscal injections and continued stagnation of the manufacturing sector as other lingering challenges facing the economy.

But Maku said the report indicated that inflation had decelerated to 10.2 per cent in the second quarter from 12.8 per cent in the first quarter of 2011 while core inflation fell from 12.8 per cent in the first quarter of 2011 to 11.5 per cent in June.

Maku said Sanusi also told the Council that food inflation declined sharply from 12.2 per cent in May, to 9.2 per cent in June 2011, while  oil sector growth at 2.90% and 3.4%, respectively.

Maku said the report also indicated that oil production has gone up to 2.4 million barrels a day and attributed the rise to the return of peace to the Niger Delta through the amnesty programme.