LAGOS — THE Central Bank of Nigeria, CBN, Governor, Mallam Sanusi Lamido Sanusi, Wednesday in Dakar, Senegal said the Federal Government’s budget of N4.485 trillion recently passed was based on an unrealistic benchmark for oil at $75 a barrel, and can cause increase in the prices of goods and services.
Sanusi spoke in Senegal while attending an Islamic finance forum in the country’s capital.
He said: “That benchmark clearly does not portend very good signals for money supply. It looks like we are going to have pressure from the money supply side.”
He expressed fears that the CBN would not meet its single digit inflation target.
Sanusi said inflation risks in Nigeria remained high and that there was no choice but to focus on tightening monetary policy. He said high food and fuel prices, coupled with high government recurrent spending, meant overall inflation would be a concern in the near-term. “I think that the indications are that … we have to look at the money supply situation very closely,” he said
He said the CBN plans to issue its first sovereign sukuk within the next 18 months in a move aimed at boosting Islamic banking in the country.
According to him, “we are working with the Debt Management Office, DMO. The CBN is collaborating with them on capacity building. We do have a target of issuing a first sovereign sukuk in Nigeria within 18 months.”He declined to say how much will be issued.