Emefiele said this during his address at the 2016 Annual Bankers Night organised by the Chartered Institute of Bankers of Nigeria in Lagos state on Friday.
He further stated that the 36 states recorded a N864bn fall in the federation allocation in the last one year and cited the low export of oil and poor income generation and some of the major challenges facing the nation.
He said Nigeria was facing “a classical case of economic stagflation” occasioned by external shocks.
In his speech entitled, ‘Policy options for reversing Nigeria’s economic downturn’, the CBN governor said the global crash in oil prices had also made foreign exchange inflows into the CBN to drop by an average of $2.3bn in the past 26 months.
He said, “In reality, Nigeria’s economy is currently facing a classical case of ‘stagflation’. This situation largely occurs when a country’s Gross Domestic Product is falling or stagnant, while unemployment and inflation are rising, all simultaneously.
“Given the sharp drop in oil prices, Federation Account allocations to states have dropped by an average of about N2bn monthly per state, which partly explains their inability to meet some basic recurrent expenditures, including payment of workers’ salaries.
“Similarly, average inflows of foreign exchange into the CBN have fallen by over $2.3bn every month over the last 26 months.”
Emefiele, also said that the country would have been able to avoid these perilous times if the right policies and proper capital controls had been put in place.
Nigeria has been facing a major economic recession, which has led to the closure of many businesses, termination of employments, as well as low federal allocation to states, amongst other issues