Given the social, political and economic uncertainty that is projected by leading international bodies, from World Bank Group (W BG), International Monetary Funds (IMF) and World Economic Forum( WEF). For instance that of WEF was much more scary as it pin pointed a global risks that is eminent. WEF used data from the Global Risks Perception Survey 2022-2023 to highlight the risks the world was likely to face. This includes High cost of energy, food crises, debt burdens, and natural disaster.
For instance WEF identified the cost-of-living crisis as the most severe threat facing developed and developing countries like Nigeria.
This is quite revealing and interesting, although the whole nation attention is dearly on the forthcoming general election that is less than 25 days from today. However, the ranging issues that burdens many Nigerians is the economy stay, and WEF identified risks alongside controversial government policies compounding the situation.
One of such is the recently increased interest rate from 16.5 to 17.5%, based on the voting pattern of the CBN Monetary Policy Committee (MPC) members. According to CBN there is need to consolidate on the gains of the previous rate as against fighting inflation.
While the NBS figure showed a slight drop from 21.47%. to 21.34%.
Based on this development the apex bank consider aggressive rate is better than a moderate rate.
Notwithstanding, a lot of analyst are off the opinion, this move by CBN is not effective in fighting inflation. Chiefly from an hindsight that we can’t fight inflation by jerking rate consecutively, the fifth this time around (13; 14; 15.16.5 and 17.5) Moreso as high rate on it own comes with it debilitating implication on businesses, investment and savings. Not to talk of it multiple negative impact on production, employment and price stability.
On the other hand, the deadline for old Naira notes is just 4 days from today. That is come Tuesday 31st January 2023 anybody failed to comply will loss there money. Regrettably, a lots of criticism greeted the naira policy from inception. Talk more of scarcity of the redesigned naira denomination of N200,N500 and N1000.
Meanwhile, there is apprehension whether CBN would extend the date. Especially, as panic is setting in and the hardline position of the apex bank. Is completely against all entreaty of the National Assembly. And the Speaker Femi Gbajabiamila and his colleagues are threatening arrest warrant on the CBN governor.
And yet still the CBN said the new notes are much more available in the Deposit Money Bank (DMBs).
For the apex bank the issues about scarcity is the creation of the DMBs. So who are we to believe and hold accountable for the dilemma.
Consequently as Nigerians continue to battle with the controversial monetary policies. The old long monster called fuel scarcity top the hardship motorist, commuters, businesses and household struggled with. This is one perianal national problem for an oil producing country that continues import refined PMS. As that not enough the president seeing the fuel scarcity as national embarrassment recently put together a 14 man panel.
To be chaired by the president, with members that includes both minister of petroleum resources, finance, NNPC,NDPRM CBN governor, DG DSS and others.
One can only wish them good luck if the term of reference of the committee mandate. Will not be sabotage, just the APC presidential candidate claimed, that fuel scarcity is hand work of sabotaging element in the country.
What is then to done. First, we must acknowledge this are self inflicted crises upon ourselves. A nation with abundance in human and natural resources but deficit in leadership that failed in economic governance and others.
Secondly, monetary policy must be meaningful to our What those high Economy. In this wise the latest rate at 17.5% must be aggressive enough to reduce or eliminate inflations pressure in our economy.
Thirdly, the introduction of redesigned naira notes must not hard more suffering to Nigerians, if need be to avoid negative economic. In other words if shifting the deadline on old Naira notes will do that, CBN have to act fast.
Lastly, the president chairing a 14 man panel is cheering. But it must avoid cosmetics approach in tackling the fuel scarcity. If need be for sanction and heavy fine on sabotages in the distribution and logistics channel. The panel must be firm to act.
For us what at all the foregoing illustrate and reinforce is the centrality and indispensable need to have a visionary and bold leadership in charge of our economic governance.
By Adefolarin A. Olamilekan