Economy: Confusion as MPC meets 


There is confusion everywhere as the economy continues to bleed, citizens facing their worst economic crises in decades as inflation maintains a steep rise consistently defying all efforts to tame it.

It is even worse as experts are no longer speaking with one voice on whether the MPC should hike the monetary policy rates, keep it where it is or lower it.

Olayemi Cardoso, the governor of the Central Bank of Nigeria is not a man to be envied at this time because this is definitely not the best time to be the CBN governor.

Cardoso took four months after his appointment to convene the first monetary policy committee (MPC) meeting. When he finally decided to hold the first one in February this year, he acted like a reserve player who watched the match from the bench. The MPC jacked up the monetary policy rate  (MPR) by 400 basis points to peg the lending rates at 22.75 percent from 18.75 percent, believing that that was the needed punch to knock out inflation. The MPC was forced to further jack up the MPR by 200 basis points in the following month of March raising the lending rates to 24.75 percent, a figure described by experts as the highest in recent history. But still,  like the stubborn goat, inflation has refused to bulge.

As the CBN governor walks into the hall to chair the MPC meeting this week, he would be saying in his mind, ‘I’ve done all I should do, what else is left?’

Of course he has already given a hint to his frustration at a recent interview he granted a foreign media outlet when he threw his hand in the air saying, “we don’t have control over food inflation which is the biggest driver of headline inflation.”

By that, the CBN governor was telling the fiscal authorities to please do something to compliment what he is doing on the monetary side.

It is now clear to Mr. Cardoso why his predecessor, Godwin Emefiele delved into development finance and began to engage in quasi fiscal policy activities. The politicians just don’t seem to know how their actions and inactions are negatively impacting the economy, for them everything is about winning the next election.

This government came in with a bang with the President on his inauguration ground announcing that subsidy is gone. That won him political points, but the country has yet to recover from the shock even as the President prepares to mark his first year in office.

Of course his team will roll out his numerous ‘achievements’ in his first 365 days in office, but Nigerians will have their own list which definitely will include high unemployment, poor infrastructure, multiple taxation, starvation, high cost of living, heightened insecurity and general despair.

Many manufacturing companies are shutting down, others are exiting the country because they can no longer cope with the cost of running their businesses. The consequence of this is that more Nigerians are losing jobs, swelling the unemployment market, even though the National Bureau of Statistics ( NBS) keeps giving unemployment figures that beat common sense.

The Manufacturers Association of Nigeria (MAN) recently cried out that the multidimensional challenges affecting the manufacturing sector in Nigeria forced 767 manufacturing companies to shut down in 2023.