Talking Economics and Politics

Photo Source: SDPB Radio I am sometimes appalled by the decisions of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) which consists of the Bank's governor (at the moment, Godwin Emefiele), his deputies, and other appointed members, with regards to the Monetary Policy Rate (MPR). I agree to a limited extent that inflation has its linked to money supply, but not in all instances, as there are varying sources of inflation, and taking a critical evaluation of the perculiarity of a country's situation should inform any policy choice. Last week, the CBN's MPC increased the short-term interest rate by a 100 basis point as a response to the continuous increase in inflation, which in my opinion, such response is nothing but a deflection. Recall that two months ago, the CBN increased MPR by 150 basis points from 11.5% to 13% when inflation was 17.71%. One would have thought that such increase would yield results by addressing the inflation crisis that we were...

  The Misery Index measures what the social and economic costs for individuals living in a country is, by summing up the rates of inflation and unemployment. Essentially, the Misery Index helps us to understand the hardship situation in a country. The first Misery Index was created by an Economist named Arthur Okun in the 1970s. The Index simply looked at inflation and unemployment variables, and how they contribute to the misery of an individual. This has since been developed by other individuals like Robert Barro and Steve Hanke. My preferred is the index Steve Hanke, an Economist from Johns Hopkins university, built upon in 2011, by adding interest rate, inflation rate and unemployment rate, while subtracting the percentage change in GDP per capita to determine the Misery Index for a country.  Misery Index in some ways, measures happiness, which is an important variable in development. It is pretty obvious why that is so, from the constellation of indicators used in the ind...

Inflation is a sustained increase in general price level, and as a consequence, it reduces the purchasing power of money. Inflation is commonly measured using the Consumer Price Index (CPI), which tracks the mean changes in prices of selected basket of goods and services within a specified period. In preliminary economics, inflation is considered a risk, just as it is considered a cost to businesses. Inflation erodes the value of a currency. In an economy or business environment where the rate of inflation continues to rise, that would mean the value of money today is worth more than it would be in the future. Three things could potentially happen in consumer behaviour response to inflation; one is that, consumers would prefer to spend the money today to avoid spending more on a later date than they would ordinarily spend for the same basket of goods and services. Consumers can choose to save, and they can also decide to invest. On savings and investments, the attraction would be the s...

The Central Bank of Nigeria (CBN) is an establishment that came into existence through the breath of the law; specifically, the CBN Act of 1958 which clearly spelt out the administrative framework and responsibilities of the CBN, under the statute of the Nigerian government. This Act allowed it began operations in 1959. Essentially, there are three major Acts of the CBN, 1958 CBN Act; 1991 CBN Act; and the 2007 CBN Act. The 1991 Act repealed the 1958 CBN Act and all of its amendments, which sought to guarantee the independence of the CBN, to a large degree. Aside being the the issuer of legal tender currency (Naira), banker to other banks, responsible for maintaining monetary and financial stability and to maintain external reserve; the CBN's major mandate is to ensure price stability, which the 2007 CBN Act puts in black and white. Within its purview, the CBN is doing everything to achieve that mandate, using the tools at its disposal. Some of which may not appear f...

In the face of the COVID-19 pandemic that already has a huge toll on Nigeria and the economy, with over 1,270 cases, and 40 deaths according to the latest reports from Nigerian Centre for Disease Control; Kano state is now embattled with an additional threat to its public health by a disease that remains unknown but suspected to be meningitis. Kano state accommodates about  16 million people , that cover an area slightly over 20,000 kilometre square, and a population density of 470 persons per kilometer square. Interestingly, Kano has 5 research centres, but none is focused on public health. It is no surprise why the cause of the ravaging killer disease still remains unknown. Although, the Federal Ministry of Health has already begun investigation. It would be expected that governments across all tiers would see spending on public health services as an investment, and by that imperative, increase budgetary allocation to key aspects of the economy; rather than ...

I recently came across a post of a Nigerian lady being put up for "sale" on one of the social media platforms by some guy who provides homes with domestic workers in Lebanon. I find this very irritating and disturbing just like many Nigerians and Africans who did not hesitate to call out and publicly backlashed the so called individual. I am happy the fellow has been arrested by the Lebanese security agency, and hopefully he would face prosecution. Nonetheless, I still have some concerns. My worry is simple, and at the same time, pathetic. Data from the Lebanese government show that Lebanon has 250,000 immigrant domestic workers, and most of them are from sub Saharan Africa. In my curiosity, I got to find out that one Lebanese pound is equivalent to about 26 kobo (0.26 naira). This fact left me in bewilderment, as to why Africans would migrate to countries that are less economically viable and disadvantaged; and with poor working conditions compared to what is obtainab...