Nigeria needs to save more for economic growth, says CBN governor

Central Bank of Nigeria

“It should be part of our constitution that a certain percentage of whatever we earn must be saved.”

The Acting Governor of the Central Bank of Nigeria, CBN, Sarah Alade, has said it is important for Nigeria to have reserves to ensure effective monetary policy and economic growth.

Ms. Alade made this known on Tuesday in Abuja, during her presentation before the National Conference Committee on Trade and Investment.

The governor said the reserves could be either in the form of excess crude account or sovereign wealth fund.

She said that though the country had cash reserves, it was not enough compared to what the country was making from oil.

“It should be part of our constitution that a certain percentage of whatever we earn must be saved so that we build up again the excess crude account.

“China today has more than three trillion dollars reserves and some oil producing countries don’t even put the oil money as part of their budget.

“They only use it when they have shortages but we rely solely on that and we don’t even make any attempt to save,’’ she said.

She said when a country saved money, it would give others the confidence that it could defend its currency and meet its debts.

Ms. Alade said the repercussion for the country not having its own saving, was responsible for the rise in interest rate.

According to her, if interest rate is not as high as it is, people will be able to borrow at a cheaper rate and then the economy will grow better.

The CBN governor said though the country had a stable exchange rate, low inflation of about 7.8 per cent and a robust growth at about seven per cent of Gross Domestic Product, it could do better.

She said that the country could easily grow at a double digit, rather than having an attractive investment climate and robust external reserves.


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