KPMG has said that the effectiveness of the Central Bank of Nigeria’s (CBN) monetary tightening strategies may fall short unless Nigeria addresses the underlying supply-side constraints fuelling cost-push inflation. 

In issue 15 of the Flashnotes publication of KPMG in Nigeria, which was seen by Nairametrics, the firm emphasised the need for a balanced approach that tackles both demand-pull and cost-push inflationary pressures. It called for collaborative efforts between fiscal and monetary authorities to dismantle the supply-side barriers contributing to inflation. 

The document read: 

• “We recognise that price stability is a necessary condition for economic growth. We equally recognise that raising interest rates is a natural response to inflationary pressures in monetary policy playbooks. 
• “However, we emphasise that monetary tightening is more apt for addressing demand-pull inflation. Thus, inflation may yield little in response to the monetary tightening efforts, unless the supply-side bottlenecks fanning cost-push inflation are also addressed. 
• “Eliminating these bottlenecks will require concerted efforts from both fiscal and monetary authorities. We are confident that such efforts will better deliver the intended price stability without trading-off economic growth.” 

Inflation may lose steam after mid-2024 

According to KPMG, a potential slowdown in inflation rates is on the horizon post-mid-2024, largely attributed to statistical base effects. 

However, this expected deceleration depends on the absence of new economic policies that might exert upward pressures on prices. 

The firm advised against attributing any reduction in inflation rates solely to monetary policy tightening, highlighting the influence of broader economic factors and policies. 

KPMG said: 

• “Meanwhile, with the onset of base effect expected after mid-year, the next few months will be important for assessing the impact of the CBN’s monetary tightening on inflation. 
• “Statistically, inflation is set to lose steam after mid-year largely because of the onset of base effect, except economic policies that significantly pressure prices are implemented. Attributing a decrease in inflation solely to the tightening of liquidity once the base effect kicks in after midyear might be inaccurate.” 

Higher MPR to drive portfolio investments 

The CBN’s decision to elevate the Monetary Policy Rate (MPR) to a historic high of 24.75% in March 2024 is expected to attract more foreign exchange inflows, driven by the appeal of higher interest rates. KPMG projected that these inflows will primarily come from portfolio investments, seeking to benefit from the increased rates. 

However, the firm also cautioned about the potential volatility associated with these “hot money” inflows, noting the risks of sudden reversals that they pose to macroeconomic stability. 

KPMG said: 

• “We expect the higher MPR to attract greater FX inflows that would drive the appreciation of the Naira in the foreign exchange market. However, most of these gains are expected to come from portfolio investments as investors move to take advantage of the higher interest rate environment. 
• “The downside of this “hot money” inflow, however, is the risk of sharp reversals in response to changes in market signals. Large scale capital reversals are historically known to birth macroeconomic instability.” 

Already, Nigeria has recorded about $3.8 billion foreign capital inflow in the first quarter of 2024 with investors (especially foreign investors) interested in government securities for high yields.  

Tightening policy threatens Tinubu’s $1 trillion economy goal 

KPMG further noted that the quest for price stability may inadvertently sacrifice economic growth. With Nigeria’s growth trajectory already on a decelerating path, the current policy stance could further deter investments in the real sector, negatively affecting employment and growth. 

The firm warned that high borrowing costs and a restrictive monetary environment might lead to an increase in non-performing loans and challenge the government’s ambitious goal of expanding Nigeria’s economy to a $1 trillion economy within the next eight years. 

The firm said: 

• “Furthermore, we note that targeting inflation from the demand-side (via a sustained monetary tightening of such scale) may inadvertently cause Nigeria to trade-off some growth for lower inflation. This is especially worrying as the nation’s growth has been slow, fragile, and decelerating (3.4% in 2021, 3.1% in 2022 and 2.74% in 2023) in recent times. 
• “With the real sector already burdened by high borrowing costs and inflation, the CBN’s decision could further shrink the sector by disincentivising investments. The higher borrowing costs may induce a scale back on investments in the real sector, adversely affecting employment and growth levels. 
• “Also, monetary tightening of such scale may give rise to higher non-performing loans. The higher interest rate environment may strain borrowers’ finances and raise their risk of defaulting on loans. 
• “Moreover, the government has expressed a desire to grow Nigeria’s economy to a $1 trillion economy over the next 8 years. This ambitious growth drive requires the economy to attain about 12% CAGR over the targeted period. 
• “However, the elevated Cash Reserve Ratio (CRR) could further restrict the ability of banks to channel credit to support the economy’s ambitious growth drive. Thus, the restrictive monetary policy environment further casts shadows on the attainability of the government’s economic objective.” 

Analysts at Augusto & Co earlier said that President Bola Tinubu’s plan to reduce interest rates in the country may clash with the existing tightening monetary policy of the CBN. They noted that the president’s preference for lower interest rates to support economic growth raises the risk of inaction and will be a true test of the CBN’s independence.

However, so far, the CBN has shown its independence with a hawkish monetary stance. 

[Nairametrics]

Tobi Amusan, the Three-time African Games winner who is still a world record holder in women’s 100m hurdles, has been listed among 12 Olympic gold medallists and 27 world champions who will compete at the Egret Stadium in Xiamen for the 2024 Diamond League season.

Note that the 26-year-old Amusan is the defending champion of the Wanda Diamond League title. She won the 2023 edition of the tournament in Eugene, Oregon, for the third consecutive season.

Amusan won the race in September 2023 within 12.33 seconds, which was his season best.

In this year’s edition of the tournament, the legendary Nigerian athlete will compete against Olympic champion Jasmine Camacho-Quinn, world champion Danielle Williams, and world indoor champion Devynne Charlton.

Recall that in the last edition of the Diamond League season, Camacho-Quinn of Puerto Rico finished second within 12.38 seconds, while Harrison of the United States finished third within 12.44 seconds.

The 2024 Diamond League in Xiamen will be more or less an exhibition of what will come at the 2024 Olympics. Note that Tobi Amusan, who holds the world record of 12.12 seconds from the 2022 Diamond League, has also qualified to compete at the Paris Olympics this summer.

[NaijaNews]

For those seeking the underlying logic to the politics of the Federal Capital Territory (FCT) minister, Nyesom Wike, and his disposition to policy, the yesterday edition of his signature media chats might provide some clues.

As an aside, it should be remarked that the Wike Media Chat has evolved as a peculiar form of projects’ advertisement which has its provenance in the politician’s days as the governor of Rivers state. It’s done in the Wike style!

A member of the yesterday panel of interviewers, Chamberlain Usoh, of CHANNELS Television asked Wike a question on the availability and  affordability of healthcare delivery in  the FCT. The interviewer pointed to the problem of few bed spaces and the  lack of health insurance for the poor among other issues.

Here is Chief Wike’s reply to the question of making healthcare available to the poor: “…When you  say affordable (it shows) that we live a life where things (are) free for (everybody). We are not in a socialist regime. We are not…”  Wike also dismissed the idea of the urgency of increasing bed spaces saying that what mattered  was bringing in standard equipment to the hospital.  Remarkably, the minister used words such as “plan,” “conception”  “standards” “costs” etc. in the course of the conversation. These are, of course, familiar words often used in the process of policy making and implementation.

Meanwhile, Wike, who likes to be addressed as “Mr. Project,” is expected to implement the N1.1 trillion budget for the development of FCT. And to  imagine that universal healthcare coverage would not be  a priority in the implementation of a N1.1 trillion budget!

Now, that is not the path of development.

As a matter of fact, Wike  earned the sobriquet of “Mr. Project” in  his days as Rivers state governor  when  for  almost a year he staged spectacles to  “commission projects.” 

The minister also spoke about some infrastructural projects in the course of the yesterday media chat. Wike’s response to the question of his policy in the health sector of the FCT is reminiscent of what a former governor told this reporter some years ago : he said what happened in the states including his own  was “governance by projects.” 

Now, there is something fundamentally problematic about the concept of development on the part of a minister who doesn’t prioritise the affordability of healthcare delivery to the poor in a country in which it is estimated that 63% live in multi-dimensional poverty. Healthcare is a major pillar of human development. Without the micro impact of  human development especially on the majority poor, all the multi-trillion  contracts for infrastructure will achieve little or  nothing in advancing human progress in the society.

At least on record, Wike is a member of the Peoples  Democratic Party (PDP), an organisation which cannot be accused of being socio-democratic in ideological  preferences. However, Wike is today a minister in a government of the All Progressives Congress (APC). By definition, a government of APC at any level should prefer progressive options in policy-making.  Progressive politics in Nigeria today is nothing if it is not an anti-poverty politics. For poverty and inequality constitute the bedrock of the problem of the Nigerian society at present. Experts of various hues have drawn an organic link between poverty and insecurity. In other words, insecurity cannot be ultimately tackled without eradicating  poverty and  reducing gross inequality. So it is never  progressive for any politician to say that making a  case for affordable healthcare is akin to expecting “to have everything free.”  To dismiss universal healthcare coverage, a central question of human development,  is far from being progressive in the present Nigerian condition. Contrary to Wike’s policy proposition, universal healthcare is not necessarily an agenda of a “socialist regime.”  Universal healthcare is available  in many capitalist countries in different forms.  For instance, despite its imperfections the British National Health Service (NHS), a heritage of the welfare state, is  cherished as a national institution and defended by Britons  across the political and ideological  spectra. Yet, Britain is not a socialist state. Here in  Nigeria, the National Health Insurance Authority (NHIA) Act (2022) and the  FCT Health Insurance Scheme established with the instrument of the FHIS Act of 2020 were enacted  for the ultimate  purpose making healthcare affordable to all. In fact, the goal of  FHIS  is to reengineer the health care funding mechanism to achieve universal health coverage in the FCT. And these are no laws made by a “socialist regime”!

For Wike, the practical politician, ideological debates about policies may be a luxury. All the “action man” would be concerned with is to award contracts for infrastructural projects and supervise their execution for delivery according to schedule.

In the process, little attention is paid to the organising principle of the execution of  these projects within a broad concept of development. Perhaps, unknown to the minister,  the implication of his laissez faire attitude to universal healthcare coverage is that market forces should determine the access to quality healthcare.

Today’s column is making the foregoing   reference to  only an aspect of the Wike media chat just to illustrate the point that there are  indeed thoughts behind policy-making.  These thoughts emanate from the  worldviews of the policymakers. Wike is not alone in not prioritising  the social sector – heath, education, social housing, mass transit etc. in policy-making.

One of the  consequences of this orientation  of officialdom is the socio-economic injustice that has ravaged  the land for decades.

Some Nigerian politicians and pundits alike glibly proclaim the end of ideology. Yet ideology is alive and shaping policies around the world. To be sure, those making choices for the society in the policy arena may not be fully conscious of their ideological options, much less articulate the ideology. Some of those who are conscious of their ideological choices deny their ideologies  because their choices are simply  indefensible. Policy dispositions that could worsen poverty are no more defended even by right-wing ideologues. Unlike their socially  ruinous economic prescriptions of the 1980s,  even the World Bank and the International Monetary Fund (IMF), the chief enforcers of  global capitalism, have since adopted anti-poverty tone in their policy prescriptions for the poor countries of the world.

Doubtless, policy-making in Nigeria cannot  not be said to be an exercise in a vacuum of ideas. Think tanks and other non-governmental organisations abound with harvest of ideas. For instance, for 31 years now the Nigerian Economic Summit Group (NESG) has provided a forum for dialogue among private sector players and public sector officials on the shape and future of the Nigerian economy. But the question persists: to what extent have the ideas generated on the platform of NESG influenced policies of successive administrations? The same question could be posed in respect of the Ibadan-based   Nigerian Institute of Social and Economic Research (NISER), which is  publicly  funded for the production of ideas and information to illuminate the process of policy-making.  The question of the impact of these institutions and many  others on policy is certainly not a rhetorical one. The question has to be definitely answered to make progress.

Talking about the ideological influences on policymakers, Nigeria is yet to fully develop the culture of  a well-defined ideological direction pushed by men of ideas. In history,  leaders had thinkers widely acknowledged to have influenced their policy directions.  The ideas in favour government-intervention proposed by  the eminent economist, John Maynard Keynes, had a lot of influence on  President Franklin  D. Roosevelt’s New Deal during the Great Depression.  If Roosevelt was influenced by Keynes, Prime Minister Margaret Thatcher was ideologically  inspired in the opposite direction by  the Austrian-born British economist Friedrich von Hayek,  a free-market economist who believed that government control of the economy was akin to “totalitarianism.”  The monetarist economist and Nobelist  Milton Friedman  was the oracle of the Chilean economic experiment under the maximum  ruler,  President Augusto Pinochet. The foregoing are, of course, liberal and conservative examples. Things are more explicit on the Left. For example, despite the cynical  western  comments about China becoming a capitalist country,   the leadership  of the country is still guided by the “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era “

In fact, Keynes, regarded in liberal circles as the greatest economist of the 20th Century put the matter of ideas behind policy like this: “Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

It is, therefore, noteworthy  that the current economic managers of Nigeria are giving some thoughts to planning as a signpost to policy-making. The other day, those in charge of fiscal and monetary  policies appeared  before the Senate to brief the lawmakers on the economy. One of them, the minster of budget and economic planning, Senator Abubakar Atiku Bagudu, instructively drew the nation’s  attention to the organising principle of economic management in Nigeria. He referred his audience to the national economic objectives enshrined in the Section 16 (2a) in  the Chapter II of the 1999 Constitution, According to  the provision,  the state shall among other things  ensure the “the promotion of a planned and balanced economic development.”

So planning is fundamental to economic development of Nigeria.

From the East to the West on the globe governments plan economies to meet their respective national objectives. China couldn’t have achieved its economic progress  without planning. This is one riddle that is hardly understood by even the experts in the West when they assess  the development of China. The economic managers of China employ the market to serve their defined purpose. They do not  surrender their economy to market forces in some sectors. China couldn’t have implemented  the most successful poverty reduction programme in economic history by blindly surrendering its social sector and other crucial areas of its economy  to market forces. It would be more difficult for a poor country  to lift its  people out of poverty significantly when  universal healthcare coverage and basic education are reduced to  commodities. 

It goes  against the grain of poverty eradication to throw  sectors such as health and education to market forces. Yes, market forces are applied in capitalist societies. But the market has its limit especially in a poverty-ridden  society: there are sectors in which market forces should not even be contemplated. Instead, of the reckless embrace of the market, policymakers should strive to plan for the common good.

Nigeria should plan its way out of poverty. And that is not a job for market forces. 

There are even liberal voices offering a word caution on the matter of jettisoning planning for the market. For example, a South Korean economist, Ha-Joon Chang admonishes in his famous book, “23 Things They Don’t Tell You About Capitalism,” as follows: “The question … is not whether to plan or not. It is what appropriate levels and forms of planning are for different activities. The prejudice against planning, while understandable given the failures of communist central planning, makes us misunderstand the true nature of the modern economy in which government and market relationships are all vital and interact in a complex way. Without markets we end up with inefficiencies of the Soviet system. However, thinking that that we can live by the market alone is like believing that we can live by eating only salt, because salt is vital for our survival.” Chang is by no means a socialist. He actually believes in the superiority of the capitalist economy. But he is rational enough to deploy his scholarship to  warn against the excesses of the system.

Those who have the responsibility  of making economic policies should be suggestible enough to ponder this point.

The Northern Elders Forum (NEF) yesterday expressed concern and disappointment on the recent decision by President Bola Tinubu’s government over the increase in electricity tariff.

It described the hike as a “reckless move” and a complete disregard for the well-being and welfare of the Nigerian people.

In a statement by Abdul-Azeez Suleiman, its Director of Publicity and Advocacy, the pan-northern group said it “recognizes that this drastic increase in electricity tariffs will have a significant negative impact on the already struggling population, further exacerbating the gap between the rich and the poor.”

It said the breakdown of the new tariffs revealed an alarming burden that the average Nigerian will face in affording electricity on a daily basis.

“Under the new tariff plan, 24 hours of electricity per day will cost a staggering N5,400, amounting to an unbearable monthly total of N162,000 and an astounding yearly total of N1,971,000.

“These exorbitant amounts are simply unaffordable for the majority of Nigerians, who are already grappling with economic hardship and trying to make ends meet.

“By implementing such exorbitant electricity tariffs, the government is effectively perpetuating a form of economic oppression that will only serve to widen the gap between the rich and the poor in Nigeria. It is imperative that this act of exploitation be firmly rejected and not be allowed to stand unchallenged.

“The decision to implement these tariffs without considering the impact on the average citizen is not only callous but also short-sighted. The resulting consequences could potentially lead to internal security threats as the disparity between the haves and the have-nots becomes more pronounced.

“The NEF strongly believes that this decision was made without carefully considering the economic realities faced by the majority of Nigerians and it highlights the government’s lack of empathy towards its citizens.

“Instead of implementing policies that would alleviate the suffering of the people, the government has chosen to further exploit them. This introduction of exorbitant electricity tariffs is not only unjust but also a clear indication of the disconnect between the government and the people they are meant to serve. It is a blatant display of the government’s blatant disregard for the well-being of its citizens and a betrayal of the trust placed in them.

“The NEF calls on the government to immediately reconsider this ill-conceived decision and take into account the dire economic situation faced by the majority of Nigerians.

“Nigerians must now rise and demand accountability from their leaders, reminding them that their primary duty is to serve the people, not exploit them for personal gain,” the group said.

[Dailytrust]

Nigerian rapper, OdumoduBlvck says he can do core hip-hop like American star, Eminem but chose not to because Nigerians ‘don’t understand’ hip-hop.

According to him, Nigerians only listen to melodic music so he “dumbed it down” so his records will be commercially successful.

Speaking in a recent podcast interview, OdumoduBlvck explained that he wants to make Nigerian rap “exciting” just like Wizkid did with R&B in the country.

He said, “Some Nigerians did pure rap but they didn’t make it exciting for people to gravitate towards it.

“People said my rap sounds like nursery school rhymes. I dumbed it down so I can sell these records, so you don’t have to think twice. When you listen to my rap, if you understand the lingo you get it once. You don’t have to go to any dictionary.

“It’s not hard core rap. It’s easy. I’ve made it exciting. Just like Wizkid, I want to make my rap sweet and exciting.

“I can rap like Eminem and all these guys but bro where I come from nobody is gonna listen to that stuff. They don’t understand it.”

[Dailypost]

Plateau Speaker Gabriel Dewan has sworn-in nine out of the 16 All Progressives Congress (APC) lawmakers. 

The Nation gathered the swearing in took place in the early hours of Friday in Jos.

It was gathered the member from Jos East was appointed Deputy Speaker of the Assembly.

 Dewan was said to have justified the swearing in based on a letter he received  mentioning where it emanated from .

Details Shortly…

[TheNation]

Some hoodlums on Friday invaded Agojeju-Odo, a community in Omala Local Government Area of Kogi State.

The gun-wielding men were said to have shot community members and burnt houses, Daily Post reports.

However, in a telephone interview with the state Police Public Relations Officer, SP William Aya, he confirmed the attack to our correspondent, adding that the state Commissioner of Police, Bethrand Onuoha, has deployed tactical teams to the area.

“Yes, there was an attack in the village in Omala. The CP has deployed the enforcement team along with other security agencies.”

Aya noted that an investigation is ongoing to “ascertain the cause of the attack and to unravel the perpetrators.”

Details later…

[Punch]

When I first met Allen Onyema many years ago, he did not strike me as a titanic alpha male. The other men present asserted themselves conversationally, but he didn’t say much or blow his own trumpet. He came across as a pleasant, self-effacing, average kinda guy.

He is still pleasant and self-effacing but has turned out to be anything but average. Iconic, super-tough, mega-smart and extraordinarily dynamic would be more appropriate descriptions.

Onyema now owns 38 planes and the only Nigerian airline that flies to Europe. He started Air Peace from scratch in 2013. Its first maiden flight to London took off from Lagos last weekend. And it’s been one helluva rocky journey from domestic to international.

Air Peace covers all six geopolitical zones of Nigeria and provides  flights to and from Abuja, Anambra, Akure, Asaba, Benin, Calabar, Enugu, Gombe, Ibadan, Ilorin, Kaduna, Kano, Lagos, Makurdi, Osubi-Warri, Owerri, Port Harcourt, Sokoto, Uyo, Maiduguri and Yola.

Onyema has also boldly ventured outside his home base and regularly ferries passengers to and from the following regional and non-African airports: Accra, Banjul, Dakar, Douala, Freetown, Monrovia Niamey, Abidjan, Cotonou, Lome, Dubai (temporarily inactive), Johannesburg, Guangzhou-China, Jeddah, Mumbai and Tel-Aviv.

Every step of the way, both here and abroad, he has endured insults and encountered countless obstacles that have been thrown across his path by hostile enemies of progress, envious competitors and ethnic bigots who can’t bear the thought of an Igbo man succeeding.

Onyema has been forced to tolerate dirty high-wire politricks from compatriots and foreigners (including some elements within the Nigerian and UK governments) who are determined to stop him.  

But he has somehow miraculously survived and thrived because of  sheer grit, nerves of steel and an unshakeable belief in his dream.

And many Nigerians love him for his great achievements.

His stubborn refusal to cave in to sabotage has enabled him to give Nigerians fair prices and humble foreign airlines that were shamelessly overcharging us for decades. British Airways, for example, has just significantly dropped its ticket costs. 

Videos of Onyema confidently leading the smiling crew of Air Peace’s first ever London flight into Lagos airport are all over the internet and make my heart swell with pride. And I’ve lapped up glowing stories from my friend, Datta Amachree, who was a passenger.

Datta has raved about the food (delicious Nigerians dishes) and impeccable service. And I am thrilled that Onyema is getting it right from Day One and that the only talk I’ve heard about teething problems relates to the Gatwick Airport authorities’ failure to deliver efficient support at the check-in desks (some suspect that the bungling and faulty equipment were deliberate enemy moves!).

Is also worth noting that Festus Keyamo, the Minister of Aviation, took the trouble to travel on the maiden flight. This, I hope, is proof that Onyema can count on Keyamo to staunchly stand by him.

Onyema has said that ALL Nigerian airlines need all the back-up they can get from the Federal Government and will blossom if doing business in this country becomes less stressful.

In the meantime, Air Peace is planning to acquire more planes and fly to more new destinations this year, including America. And Onyema is planning to build on his philanthropic track record, which includes:

1. Distribution of food items to indigent members of the public during the COVID-19 outbreak in 2020.

2. Donation of a big 550 KVA power generating set to the Nnamdi Azikiwe University Teaching Hospital in Anambra State, 2019.

3. Construction of a 15-bedroom guest house at the University of Ibadan in 2020. The building was commissioned in 2022.

4. Donation of relief items running into millions to Internally Displaced Persons in four camps in Yobe State, 2016.

5. Donation of 70 million naira for the building of a Nonviolence and Peace Studies Centre at the Anambra State University in 2018.

6. Several evacuation flights for Nigerians and non-Nigerians during COVID-19 lockdown.

7. The evacuation of 503 Nigerians in South Africa amidst xenophobic attacks in 2019.

8. Evacuation of Nigerians during the Ukraine-Russia crisis in 2022.

9. Evacuation of 277 Nigerians from Egypt amidst the Sudan crisis in 2023.

10. Sponsoring the building of a Wall of Fame for the 1976 Nigerian sports heroes of the Montreal Olympics- CSR ongoing- 2022.

11. Offer of free tickets (six times) annually for the surviving members of the 1980 National Football Team- 2022.

12. Priority Boarding Policy for Nigeria’s military personnel- serving and retired- 2022.

13. Award of N1 million to Nigeria’s gymnastics sensation, Stephanie Onusiriuka, for winning a Gold Medal at the Junior Olympics of the African Club Championship in Pretoria. The 11-year-old also gets free tickets annually to Air Peace destinations for trainings and competitions.

14. Offer of 15% discount to Nigerian students in the UK for our London service.

Onyema’s vision isn’t just about making money. It is also about assisting fellow Nigerians and improving our society.

More grease to Onyema’s elbow!