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Pay contractors to ease liquidity squeeze, CBN tells FG

The Central Bank of Nigeria (CBN) has called on the federal government to make haste and pay the contractors doing business in the economy so that more cash can move into the economy to spike activities.

This formed part of the measures to protect the integrity of the financial system as rolled out by the CBN at the end of the last Monetary Policy Committee (MPC) of the year in Abuja.

In a communiqué issued at the end of its two-day meeting in Abuja, the committee explained that the debt profile had slowed down economic activities.

The 40 paragraph document read by the CBN Governor, explained the importance of pushing cash to the economy by way of settling confirmed debts owed by the apex government which has ran into trillions of naira before now.

CBN Governor, Mr. Godwin Emefiele made it clear that “Members stressed the need for a robust and more keenly coordinated macroeconomic policy framework that would restart output growth, stimulate aggregate demand and rein in inflation expectations.

“The MPC urged the Federal Government to urgently assess the extent of its indebtedness to domestic economic agents and develop a framework for securitising the debts in order to settle its outstanding domestic contractual obligations, which cut across all sectors of the economy.

“These accumulated debts have slowed the business activities of economic agents, most of who are indebted to the banking system, thus compromising the integrity of the financial system. It also advised the bank (CBN) to commit to greater surveillance and deployment of early warning systems in managing the banking system.”