The Central Bank of Nigeria (CBN) has temporarily withdrawn its recently issued *Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2024–2025*, following widespread misinterpretation of the document by the media and stakeholders. The document, initially released on September 17, 2024, outlined various monetary policies, but was met with confusion, prompting the CBN to retract it to avoid further misinformation.
In a statement released on the bank’s website on Friday, September 20, 2024, the CBN clarified that the guidelines were not new directives, but rather a compilation of previously issued policies effective up to December 31, 2023. It explained that some of the policies mentioned in the document had since been revised or updated, and the withdrawal was necessary to prevent further misrepresentation.
Key Points of Misinterpretation
One of the major points of confusion centered around the CBN’s policy on the *Ways and Means Advances*, a financial tool used by the government to borrow short-term funds from the central bank. The retracted document stated that the CBN would sustain the 5% limit for this borrowing in 2024-2025, a figure that contradicted recent legislation passed by the National Assembly, which raised the borrowing cap to 10%. This led to speculation that the CBN was resisting the new legal framework.
Another point of controversy was the reinstatement of the cyber security levy, which had been suspended earlier in the year after public backlash. The inclusion of this in the guidelines fueled confusion, as many believed the CBN was reintroducing the levy, despite the earlier suspension.
In response to the confusion, the CBN stated that these policies were part of older directives and that some had already been superseded by more recent developments. For instance, the cyber security levy suspension in May 2024 overrode the circular referenced in the guidelines.
Clarifications by the CBN
The CBN stressed that the withdrawn guidelines were meant to serve as a reference for policies and directives already issued by the bank up to the end of 2023. The bank reiterated that they were not new policies and should not have been interpreted as such.
“Some recent media publications referencing aspects of the guidelines refer to policy positions of the bank issued prior to December 31, 2023, which have changed in light of revisions and updates in 2024,” the CBN explained.
Further, the bank addressed technical aspects of the guidelines that had been misrepresented, specifically concerning Nigeria’s external reserves and the impact of fuel subsidy removal. The CBN noted that reports linking these topics failed to grasp the analytical foundation behind the statements in the document. The bank clarified that Nigeria’s current monetary and fiscal policies have positively adjusted the economic outlook since the time these earlier policies were implemented.
Temporary Withdrawal to Avoid Further Confusion
The CBN decided to pull back the policy guidelines to “minimize the risk of any further misrepresentation,” and reiterated that any proceeds from the eventual sale of such policies would first be used to reduce the bank’s net interest costs. The bank promised to continue providing clear and accurate monetary policy direction moving forward, urging all stakeholders to seek clarification directly from the bank when in doubt.
The statement concluded by affirming that the CBN would provide regular updates on its policies and guidelines and encouraged media outlets and other stakeholders to ensure accurate reporting to prevent misinformation that could mislead the public.
Impact and Implications
The withdrawal of the document has raised concerns about the clarity of Nigeria’s current monetary policy direction, especially in the context of an already challenging economic environment marked by high inflation and fluctuating exchange rates. The misinterpretation of policies has the potential to create further uncertainty among investors, businesses, and the general public, particularly at a time when Nigeria’s economy is undergoing significant adjustments.
As the CBN works to regain control over the narrative surrounding its policies, it remains critical that communication between the bank and its stakeholders is transparent and consistent to avoid future misunderstandings. The temporary withdrawal of the guidelines serves as a cautionary measure to ensure that all policies are correctly understood and reported, helping to maintain confidence in the country’s financial system.
