Former Emir of Kano, Muhammad Sanusi, has disclosed the method by which the Central Bank of Nigeria (CBN) undermined the strength of the naira. Sanusi asserted that the CBN’s extension of loans to the federal government during the tenure of former President Muhammadu Buhari, specifically through ways and means, instigated inflationary pressures in Nigeria, leading to the devaluation of the Naira.
Speaking at MTN Capital Markets Day on Tuesday, Sanusi highlighted the CBN’s adoption of forceful monetary tightening through various liquidity control mechanisms, such as open market operations, Open Buy Back (OBB), and elevated T-bills rates. He clarified that these actions demonstrated the central bank’s commitment to its fundamental responsibility of upholding financial system stability and managing inflation.
“I am optimistic, especially in the short term. We’ve had eight years of rapid expansion of the central bank’s balance sheet through ways and means. And that has fueled inflation and weakened the currency. And that is a fact,” he articulated.