The Central Bank of Nigeria (CBN) has been at the forefront of implementing strategic measures to maintain price and monetary stability in the country. Facing persistent inflationary pressures, the CBN has adopted a series of orthodox monetary policy measures, aimed at restoring confidence, strengthening policy credibility, and focusing on its core mandate of price stability.
For a while now, Nigerians have grappled with rising inflation, which has eroded purchasing power and posed significant challenges to economic stability. As of December 2024, headline inflation stood at 34.80%, driven primarily by core inflation, while food inflation showed some signs of moderation. The National Bureau of Statistics (NBS) attributed the rise in food inflation to increases in prices of items like yam, water yam, sweet potatoes, maize, rice, and corn.
In response to these inflationary pressures, the CBN’s Monetary Policy Committee (MPC) initiated a tightening cycle using orthodox approaches. Throughout 2024, the Bank implemented several bold policy measures across six MPC meetings, including raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50%, increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50.00%, and adjusting the asymmetric corridor around the MPR.
Foreign exchange reforms and external reserves were also worked upon. To enhance efficiency in the foreign exchange (FX) market, the CBN introduced unified multiple exchange rate windows. This reform has yielded tangible results, with remittances through International Money Transfer Operators (IMTOs) rising 79.4% in the first three quarters of 2024 to $4.18 billion, compared to $2.33 billion in the same period of 2023. Additionally, the CBN cleared a backlog of foreign exchange commitments totaling $7.0 billion, restoring market confidence and improving FX liquidity.
These efforts have contributed to a relative stability in the foreign exchange market, narrowing exchange rate disparities, and increasing external reserves, which stood at over $40 billion as of December 2024.
Banking Sector Reforms are also on the agenda. In a bid to strengthen the resilience and global competitiveness of Nigeria’s banking sector, the CBN introduced new minimum capital requirements for banks, effective by March 2026. International banks are now required to have a minimum capital of N500 billion, national banks N200 billion, and regional banks N50 billion. This move aims to stabilize the banking sector amid economic challenges, positioning it to support the ambition of a $1 trillion economy.
The CBN also launched the Women’s Financial Inclusion Framework Initiative (WIFI) under the National Financial Inclusion Strategy, designed to bridge the gender gap in financial access. This initiative aims to empower women through financial services, education, and digital tools, thereby promoting inclusive economic development.
CBN need to put Nigeria’s Position on the radar in the context of Global Economic landscape. This is crucial. On the global stage, advanced economies are transitioning toward monetary easing, and cautious optimism is emerging around potential improvements in capital flows to emerging markets. Nigeria’s ability to attract these inflows will depend on investor confidence in domestic reforms, particularly those ensuring macroeconomic stability and delivering positive real returns on investment.
We commend the CBN for these positive developments. Despite these, challenges still remain. Domestic structural challenges, exchange rate pass-through effects, and energy price adjustments continue to exert pressure on prices and economic activity. Managing the disinflation process requires a careful balance of policies that mitigate short-term costs while anchoring long-term stability.
The apex bank’s commitment to price and monetary stability, coupled with coordinated policy measures and structural reforms, is essential to navigate these challenges and achieve sustainable economic growth. And we urge collaboration between policymakers, the private sector, and civil society. This is crucial to drive meaningful change for the overall economic development of Nigeria.
The CBN’s efforts at sustaining price and monetary stability are multifaceted, involving stringent monetary policies, foreign exchange reforms, banking sector strengthening, and financial inclusion initiatives. While significant progress has been made, continued vigilance and proactive measures are necessary to consolidate these gains and ensure long-term economic stability.
[04/03, 12:57 pm] Mr Ogoh 2: INSURANCE
Health Insurance: A Vital Need for Nigerians
The Current situation of life in Nigeria makes taking health insurance a wise choice today, with current economic realities. Crucially, the importance of health insurance cannot be overstated. It serves as a critical tool for financial protection, access to quality healthcare, and the promotion of preventive care. For Nigerian citizens, embracing health insurance is not just a personal benefit but a collective step toward a healthier and more secure society. By understanding the value of health insurance and actively participating in available schemes, Nigerians can ensure better health outcomes and contribute to the development of a resilient healthcare system.
In Nigeria, access to quality healthcare has long been a pressing concern. Despite various initiatives, a significant portion of the population remains without adequate health coverage. As of 2021, only about 3% of Nigerians had health insurance, leaving the vast majority vulnerable to the financial burdens of medical expenses. This statistic underscores the urgent need for citizens to recognize the importance of health insurance and to take proactive steps toward securing their health and financial well-being.
The National Health Insurance Scheme (NHIS), established in 2005, was designed to provide social health insurance, allowing participants to pay regular contributions into a pooled fund. This fund is then used to cover medical expenses, thereby reducing the reliance on out-of-pocket payments.
Despite this initiative, the uptake has been limited, with coverage primarily among formal sector employees. This leaves a substantial portion of the population, particularly those in the informal sector, without coverage.
The low penetration of health insurance in Nigeria can be attributed to several factors, including lack of awareness, misconceptions about insurance, and financial constraints. However, the benefits of health insurance far outweigh these challenges. Here are compelling reasons why Nigerian citizens should prioritize obtaining health insurance:
i. Financial Protection Against Unexpected Medical Expenses
Illnesses and accidents are often unforeseen and can lead to substantial medical bills. Without insurance, individuals may find themselves depleting their savings or going into debt to cover healthcare costs. Health insurance provides a safety net, ensuring that policyholders are protected from the financial strain of unexpected medical expenses.
ii. Access to Quality Healthcare Services
Health insurance plans often grant access to a network of accredited healthcare providers, ensuring that policyholders receive quality medical attention when needed. This access can lead to better health outcomes and a higher standard of care.
iii. Promotion of Preventive Care
Many health insurance plans cover preventive services such as vaccinations, screenings, and regular check-ups. Engaging in preventive care can lead to early detection of health issues, making treatment more manageable and less costly in the long run.
iv. Reduction in Out-of-Pocket Expenditures
Nigeria has one of the highest rates of out-of-pocket health expenditures globally, with individuals bearing a significant portion of healthcare costs directly. Health insurance alleviates this burden by covering a substantial part of medical expenses, allowing individuals to allocate their resources to other essential needs.
v. Contribution to Health Sector Development
Increased participation in health insurance schemes can lead to a more robust healthcare system. With more funds pooled through insurance, there is potential for improved healthcare infrastructure, better training for medical professionals, and enhanced availability of medical supplies.
To fully reap the advantages of health insurance, citizens should consider the following strategies: selecting the appropriate plan, regular policy reviews, utilizing covered services, understanding policy terms
Selecting the Appropriate Plan: it is crucial to choose a health insurance plan that aligns with individual health needs and financial capabilities. Reviewing the coverage details, network of healthcare providers, and premium costs can help in making an informed decision.
Regular Policy Reviews: healthcare needs can evolve over time. Regularly reviewing and updating insurance policies ensures that the coverage remains relevant and adequate. This practice can prevent situations where policyholders are underinsured or overpaying for unnecessary coverage.
Utilizing Covered Services: policyholders should take full advantage of the services covered under their insurance plans. This includes attending regular check-ups, screenings, and utilizing wellness programs. Engaging with these services not only promotes better health but also ensures that individuals get value from their insurance premiums.
Understanding Policy Terms: a thorough understanding of the terms and conditions of the insurance policy is essential. Being aware of coverage limits, exclusions, and the claims process can prevent misunderstandings and ensure a smoother experience when accessing healthcare services.
Commendably, over the years, the Nigerian government has made efforts to expand health insurance coverage. For instance, the Lagos State Government introduced the “ILERA EKO” health insurance scheme, administered by the Lagos State Health Management Agency (LSHMA), to provide affordable and quality healthcare services to residents.
By enrolling in health insurance schemes, individuals not only protect themselves and their families but also contribute to the overall improvement of the healthcare system. Collective participation leads to a more substantial pooling of resources, which can be utilized to enhance healthcare infrastructure and services.
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