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Published On: Thu, Jun 19th, 2014

Unemployment rate, target variable for CBN’s monetary policy formulation-Emefiele

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Emefiele GodwinBy Aminu Imam

The, Central Bank of Nigeria (CBN) yesterday said in line with the pursuit for a Gross Domestic Product (GDP) indicator that reflects the economic realities of Nigerian people that motivated him  to incorporate unemployment as a target variable in the monetary policy formulation for the Monetary Policy Committee (MPC).

Making the declaration in Kaduna yesterday, at the on-going seminar for Finance Correspondents and Business Editors, with the theme: “Rebasing of Nigeria’s Economy and Implication for FSS 2020”, the CBN Governor, Mr. Godwin Emefiele, reiterated   that, “As a follow up to the above, it is my resolve to hone the CBN Development Finance agenda by targeting employment-generating sectors like Agriculture, SMEs, Oil and Gas, Power and the Health sectors, aimed at confronting the prostate productive sectors, the embarrassing youth unemployment and huge infrastructure gap.

He was represented by the Director, Research Department, CBN, Mr. Charles Mordi.

Emefiele further said, “This, therefore, extends the scope of the MPC target variables beyond the conventional price and financial stability to include gauging the misery indices of poverty and unemployment.

“According to data released recently by the National Bureau of Statistics (NBS), the ‘‘real’’ GDP currently stands at 1990 basic prices with a nineteen-year lag considering 2010 as new base year. This lag poses a significant challenge in recording the accurate economic realities over a period of time.

“For instance, it was discovered that within the 19 year-lag, tremendous growth was recorded in the telecommunication, information technology and the distributive trade sectors of the economy. It would therefore be unrealistic, to stick to the 1999 base year figures given such structural changes and in addition to changes in the price structure over these years.

According to him, ““Given these dynamics, GDP rebasing becomes inevitable in order to ascertain mare accurate estimates of the size and structure of the economy. It also means that the recent rebasing will help economic planners to gauge whether the government is indeed realizing its goal of achieving vision 20-2020 or not”.

In his remarks, the apex bank’s Director, Corporate Communications, Mr. Ahmed Abdullahi said the theme of the seminar was apt and timely, following the recent rebasing of the country’s economy and making it the biggest economy in Africa.

“It has become imperative to direct our attention to this topical economic issue, considering journalists’ role in enlightening and educating the society with regards to measures that have been taken by relevant authorities in rebasing/re-benchmarking Nigeria’s GDP”, he stated.

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