Yinka Adetuberu’s Post

#Monetary Policy Introduction: The current economic conditions in Nigeria necessitate a review of the monetary policy stance to address the high inflation rate, manage liquidity, and promote economic growth. This position paper advocate for the adjustment of the monetary policy rate and maintaining a tight monetary policy stance will address the high inflation rate and manage liquidity. Specifically, by- Increasing the MPR to 30% to reduce inflationary pressures and anchor expectations,whilst Maintaining the CRR at 50% to ensure adequate liquidity in the system and Reducing the liquidity ratio to 25% to discourage excessive borrowing and promote financial stability hence - Adjusting the asymmetric corridor to +200bps/-50bps to allow for flexibility in interest rate setting Rationale for increasing MPR rate 27.5% ✓High inflation rate: The current inflation rate of 33.87% is above the target range and requires a monetary policy response to anchor expectations and reduce inflationary pressures. ✓- Liquidity management: The high liquidity ratio and low CRR have resulted in excess liquidity in the system, which must be managed to prevent inflation and maintain financial stability ✓- Economic growth: A tight monetary policy stance will help promote economic growth by reducing inflation and increasing confidence in the economy. Conclusion: The proposed adjustments to the monetary policy rates will help address the high inflation rate, manage liquidity, and promote economic growth in Nigeria. We believe that a tight monetary policy stance is necessary to achieve these objectives and ensure financial stability.

According to an IMF report, Nigeria's current account balance has increased by $1.43 billion. According to recent data from the International Monetary Fund's World Economic Outlook Database, Nigeria's current account balance saw a surplus of $1.432 billion in 2024, marking a significant increase from the $1.21 billion surplus recorded in 2023. The current account balance reflects a nation's trade balance, net income, transfers, and asset income, indicating its international economic transactions. The positive balance indicates a net lending position, showing a healthy economic stance. This improvement is attributed to Nigeria's rising gross national savings and investment, with savings increasing to 26.32% of GDP and total investment rising to 25.75% in 2024. Economic experts view this as a sign of a robust economy driven by increased activity and confidence. Economist Olorunfemi Idris noted that the surplus suggests a favorable trade and income situation, contributing to Nigeria's economic stability. This development is crucial not only for Nigeria but also for the broader African continent, signaling positive economic growth and stability.

An insightful evening in Washington DC with the Governor of the Central Bank of Nigeria and his team. The CBN sought the perspective of diaspora Nigerians as it looks to increase diaspora participation/investments in and knowledge transfer to the Nigerian economy. A very important point made by Ndidi Okonkwo Nwuneli is the need to change the narrative about Nigeria and creating financing vehicles that allow those in the diaspora to invest in Nigeria. Tariye Gbadegesin noted Diaspora bonds as one instrument that has worked in the past and about leveraging Nigeria’s vibrant private sector in tackling the climate and debt crisis. The Access Bank MD, Roosevelt Ogbonna with concern for the cost of borrowing in Nigeria, questioned the big difference in basis points as too high to account for Nigeria risk and noted that the cost of risk and the implications of not having the right narrative is something we cannot take for granted. All very important points that the CBN Governor noted. He also noted information provided by the World Bank earlier that day, that sending remittances to emerging markets such as Nigeria, typically incurs a cost of 7%, while sending to other regions is significantly lower at 2%, meaning that transferring money to developing countries often comes with a much higher fee compared to sending to more developed regions. This cost he noted has to be narrowed and the CBN continues to work on this issue. On currency, the Governor noted that Currency is determined by fundamentals while the CBN works to manage the volatility that the currency experiences citing the convergence of forex rates that also allows IMTOs to provide much needed service to those in the diaspora. All in all, the CBN continues to work to restore confidence and narrow or close the trust deficit experienced by Nigerians in the general economy and make it a more attractive destination for investments.

The World Bank Group has released its latest Nigeria Development Update (NDU) titled "Staying the Course: Progress Amid Pressing Challenges." This report offers an in-depth analysis of Nigeria's recent economic and social developments. #worldbank #worldbankgroup #nigeria #development #report

Explainer Series| Meristem Nigeria: Nigeria 2024 Half-Year Outlook In the first half of the year, the global economy witnessed better-than-expected growth amid tight monetary policy for most of the period. Notably, inflationary pressure eased across major economies, spurring a positive growth outlook for the global economy. In the same vein, Sub-Saharan Africa showed signs of a gradual economic rebound, marked by declining inflation and improvements in the oil sector. However, debt sustainability remained a major concern as countries engaged in debt restructuring arrangements with creditors. On the domestic front, Nigeria's economy continued its growth momentum, driven by the recovery of the oil sector and the exceptional performance of the financial services sector. However, this growth was moderated by factors such as tighter monetary policies and inflationary pressures, which had a dampening effect on the non-oil sector. In our 2024 half-year outlook report, we explore the macroeconomic and financial markets environment for H1:2024, while providing guidance on strategies for investment positioning in H2:2024. Kindly find attached the full report. #growth #finance #wealthmanagement #assetmanagement #investing #bonds #stocks #cash #commodities #marketreport #marketreview #financialmarket #nigeria #usa #globaleconomy #globalequities #stockmarket #chinaeconomy #macro #markets #investmentbank #finance #education #trading #investing #economy #southafrica #inflation #market #eurozone #hike #quality #macroeconomics #economicgrowth #investment #investments #infrastructure #bank #future #investmentbanking #strategy #nigeriaeconomy #monetarypolicy #currency

Nigeria's Economic Outlook 2024: Navigating Challenges, Unlocking Opportunities As we navigate 2024, Nigeria's economy faces both headwinds and tailwinds. Key trends to watch: - Inflation: 20.5% (Jan 2024) - a 6-year high, driven by currency fluctuations and supply chain disruptions - Unemployment: 35.1% (2024) - a 14-year high, with youth unemployment at 42.5% - GDP Growth: 3.5% (2024 proj.) - slow growth amidst global economic uncertainty - Digital Economy: ₦14.5 trillion (2023) - a bright spot, with fintech and e-commerce driving innovation To unlock Nigeria's economic potential, we must address structural challenges and leverage opportunities in: - Diversification: Beyond oil, exploring sectors like agriculture, manufacturing, and services - Infrastructure: Investing in transportation, energy, and digital infrastructure - Human Capital: Upskilling and reskilling our workforce for a rapidly changing economy Let's collaborate to drive data-driven insights, policy reforms, and innovative solutions for Nigeria's economic growth. Hashtags: #NigeriaEconomy #EconomicOutlook #DataDriven #PolicyReforms

Nigeria's Journey Towards Navigating Economic Turbulence: As of mid-2024, Nigeria's economy shows moderate improvement, with various economic indicators presenting a mixed outlook. The country’s economic performance has been notably impacted by fluctuations in its oil production, facing several hurdles, including an unfriendly business environment, high living costs, and ballooning public debt. The Central Bank of Nigeria has responded by raising policy rates to curb inflation (which peaked at a 2-decade high of 18.8%) as the decline in oil output, one of Nigeria’s biggest market products, had previously constrained growth. Abigail Chidera Eresama, one of our co-ordinators, believes that ongoing efforts to increase domestic refining capacities, by addressing climate change, public debt, and unemployment concerns are expected to reduce fuel costs and support economic expansion.

Dive into the April macroeconomic report for a comprehensive look at Nigeria's current economic landscape. From exchange rate volatility to inflation concerns and dwindling reserves, we analyze the intricate forces at play. Explore the Central Bank of Nigeria's strategies to combat inflation and the associated costs. Delve deeper into the seismic shift in the banking sector, assessing recent downturns and the allure for foreign investors. Highlighting the urgent need for reforms, we paint a vivid picture of the sector's trajectory with a blend of historical context and current insights. The Nigerian Stock Exchange (NGX) faced a significant setback in April, with the All-Share Index (ASI) dropping by 6.06%, notably impacting the Banking sector with a 24.8% decline. Does this signal a looming storm or just a fleeting setback post Q1's stellar performance? The bearish sentiment in the Sub-Saharan Africa (SSA) euro bond space reflects uncertainty, influenced by expectations of prolonged contractionary US monetary policy. This downturn underscores the importance of economic stability in the region. Amidst the drama of battling inflation, the CBN navigates a delicate balance between curbing inflation and fostering economic growth. Our monthly report offers insights into these complexities, serving as a roadmap through Nigeria's evolving economic landscape. Regards.

According to the IMF, the Nigerian informal sector accounted for 57.7% of Nigeria's 2022 GDP, making it a major contributor to Nigeria's economy. With a funding gap of over N615b in the informal space-the space has it potentials and landmines. Understanding the informal financial sector's nuances is vital in navigating its complexities. With estimates suggesting it constitutes a significant portion of GDP in developing nations, its size underscores its economic importance. However, challenges such as regulatory ambiguity and predatory practices pose risks to participants. Despite this, opportunities for innovation abound, particularly through technology and community-driven initiatives. By embracing these opportunities and implementing robust risk mitigation strategies, stakeholders can foster financial inclusion while safeguarding against exploitation. This nuanced approach is essential for unlocking the sector's potential to drive inclusive economic growth and empower underserved communities. At Sustainable and Inclusive Digital Financial Services we continue to support financial services providers to understand this space, through the understanding of human design methodology to design,deploy and grow sustainable products to penetrate the segment. PremiumTrust Bank Zenith Bank Plc CREDIT DIRECT LIMITED Leadway Sustainable and Inclusive Digital Financial Services #FinancialInclusion #Innovation #RiskMitigation

In my recent research, I discovered that Nigeria's economy may struggle to thrive due to conflicting policies. For the economy to flourish, the institutions responsible for monetary and fiscal policies must align their goals. Notably, I observed that the Central Bank of Nigeria (CBN) is combating inflation using contractionary policies, whereas the federal government is implementing an expansionary policy budget. This inconsistency may hinder economic growth. In my research I emphasizes the need for coordinated policy reforms to restore macroeconomic stability and promote sustainable growth.