“Monetary policy has been severely challenged, as its policy space narrowed significantly, in some cases, paradoxically and necessitating the need to rethink monetary policy in the context of emerging challenges and economic transformation,” he said.
Speaking on the theme: “Monetary Policy Implementation in a Digitally evolving Developing Economy’, Emefiele said the evolution of Fintechs, cryptocurrencies, digital payments, artificial intelligence and machine learning, have changed the functioning of the financial and banking sectors, both globally and domestically.
“Therefore the urgent call for the need to rethink financial system regulation, supervision and monetary policy implementation. While the innovations come with lot of risks and uncertainties for the sectors, they also have many benefits for positive economic transformation and particularly, financial inclusion which has been the principal catalyst for inclusive growth, poverty reduction and employment generation,” he said.
He said the CBN championed the financial inclusion principle to achieve the Sustainable Development Goals, including the recent launch of the eNaira to capture the large unbanked populace into the formal sectors and also improve monetary policy efficiency and positive impact on the better standard of living for the population.
“I am aware that global experts and colleague Governors from other central banks, would speak to us at this retreat, including the IMF, BIS, Bank of Kenya and private sector players. Members would also share their experiences and thoughts on these emerging issues with the objective of collating some well thought-out and implementable measures to address the impacts of digitilisation on the Nigeria economy,” he said.
Emefiele added that while post-COVID growth recovery in Nigeria can be adjudged to be moderate and stable, we have seen a major change in the key sectoral drivers of that stable growth phenomenon, including the services sector, modernised agriculture, and manufacturing, suggesting that technology and innovation is playing a major role in output growth and economic development in Nigeria. Hence the need to explore new ways of adapting monetary policy tools to improving the contribution of technology and innovations to the growth equation.
He said the increasing prominence of digital finance, particularly accelerated by the outbreak of the COVID-19 pandemic and the unprecedented challenges it posed to the global economy, has rendered it the subject of intense discussions by policymakers and scholars.
Emefiele said there is near consensus on the potential of digital finance in boosting growth performance by facilitating the interconnectedness of agents in economic activities, access to a diverse range of financial products and credit facilities for individuals and small, medium, and large enterprises.
He added that digital financial services are reputed to have created 95 million job opportunities and boosted the Gross Domestic Product of emerging economies by six per cent.
“Digital finance supports greater financial inclusion by making possible the extension of financial services to non-financial sectors, and to individuals with minimal access to smart electronic devices,” he said.
He said the central banking and monetary policy relevance in the digital ecosystem is sometime challenged as the regulatory oversight functions are largely eroded or weakened by impotency of traditional tools in carrying out those functions.
