CBN withdraws monetary policy document amid misinterpretation concerns

The Central Bank of Nigeria (CBN) has temporarily retracted its Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2024–2025, initially published on Tuesday, September 17, 2024.

The CBN explained that the decision was made to prevent further misrepresentation or misunderstanding that could lead to confusion among stakeholders.

In a statement published on Friday, but unsigned by any CBN official, the bank clarified that certain outlets mistakenly interpreted the guidelines as new policies. The CBN stressed that the document was merely a collection of existing directives and policies, valid until December 31, 2023, and not newly introduced rules.

Two controversial excerpts from the document had sparked confusion: one concerning the continuation of Ways and Means Advances to the Federal Government at a 5% limit (contrary to a National Assembly bill raising it to 10%), and another about the reintroduction of the suspended cybersecurity levy.

The statement read, “The attention of the Central Bank of Nigeria has been drawn to certain instances of misinterpretation or misrepresentation of its biennial publication on Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines published on September 17, 2024.

“In response, the CBN has temporarily withdrawn the document to minimise the risk of any further misrepresentation. As is stated explicitly in the document to guide stakeholders, the CBN reiterates that the publication is a compilation of previously issued policies and guidelines issued by the bank up to a cut-off date, typically December 31 of the relevant year.

“As in all previous editions, the current document is intended to achieve the following objectives: A single reference source for the ease and convenience of stakeholders. A valid compilation of policies, directives, and guidelines for adjudication in conflict situations involving stakeholders.”

The bank noted that as a compendium of previously issued policies and guidelines, the provisions apply only to the extent that there have been no updates or revisions to the guidelines and policies contained therein. This, it said, is stated explicitly in the document to guide stakeholders.

“In line with prior editions, the most recent publication (January 2024) contains policies and guidelines issued by the bank up to December 31, 2023, some of which will remain relevant during the period 2024 – 2025,” the bank stated.

Continuing, the statement noted that, “In the light of these clarifications, we ask stakeholders to note the following: 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 the light of revisions and updates in 2024. One example is the Cyber Security Levy, which was suspended in May 2024, superseding the circular reported in the guidelines.

“Certain technical aspects of the guidelines have been widely misreported and

misrepresented. For example, reports have mistakenly sought to link the fuel subsidy removal to external reserves. Such reports essentially missed the analytical basis for the original statement, which was intended to observe a potential risk that was to be mitigated by policy. More recently, policies of the bank around the naira exchange rate and those of the fiscal authorities have positively altered the outlook of the subject in question.

“In summary, the guidelines must primarily be viewed as a record of policies, circulars and directives issued by the bank up to the end of 2023. They are not new directives and should not be reported as such.

“The bank will continue to provide clear monetary policy direction and advice for the overall good of the economy. We urge all stakeholders to seek clarification of information about the Bank before publishing,” the statement concluded.