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Economists list expectations ahead of Monetary Policy Committee meeting



Some economists have advised the Monetary Policy Committee, MPC, of the CBN to come up with aggressive and radical policies that would reduce inflation and high exchange rate.

The experts gave the advice in separate interviews with the News Agency of Nigeria on Saturday in Lagos ahead of the MPC meeting, scheduled for November 22 and 23.

They noted that doing so would help promote and stimulate economic growth.

Hassan Oikhenan, a professor of Economics at the University of Benin, Edo, told NAN that the MPC should agree to stop further printing of higher denominations of the Naira, as part of radical approach to save the economy.

“For example, the authorities might be on course to achieving this if the bold decision to make the N100 note the highest denomination in the economy, discontinuing in so doing further printing of higher denominations is taken at this MPC.

“There is also the need to put in place a ban on access to foreign exchange for the purchase of high end consumer goods, including exotic cars and private jets, as well as putting in place strong policies to restrict access to foreign exchange for medical tourism by government officials.

“These may sound utopian ideas but they are the kind of drastic measures that are needed to start off the much needed turnaround of the economy.

“We would expect, of course, to hear the usual cosmetic outcome of retaining the monetary policy rate at 11.5 per cent.

“It is too cosmetic to make any difference, considered against the background that what is needed to make a radical difference now is a deep surgical operation.

“There is the overriding need to shift away from massaging the deep and fundamental problems that have bedeviled the economy, especially since 2015,” Mr Oikhenan said.

Ndubisi Nwokoma, director, Centre for Economic Policy Analysis and Research, University of Lagos, urged the committee to take the current state of the economy into consideration in its decisions.

“Given that the economy is gradually recovering from the pains of the COVID-19 pandemic in addition to the reduction in the rate of inflation, the focus of the MPC should be on the promotion and stimulation of economic growth.

“Making credit easy, in my opinion, should be a focus in order to support MSMEs to expand production and job creation.

“A slight reduction in the MPR may not be a bad idea. Excessively reducing the MPR may on the other hand truncate the reduction in the inflation rate,” Mr Nwokoma, a professor, said.

Akpan Ekpo, chairman, Foundation for Economic Research and Training, Lagos, said that inflation was trending downward as such, there may not be a drastic change in the Monetary Policy Rate, MPR.

“I do not foresee any change in the MPR; inflation is trending downwards, hence the apex bank may continue to rely on the fiscal side to walk the talk. Not much has happened since the last MPC to warrant drastic changes.

“In addition, continued implementation of structural/investment policies should continue. The Bank would urge the public to utilize the eNaira to enhance financial inclusion,” Mr Ekpo, a professor, said.


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