Dear Subscriber,

The release of sluggish Q1 GDP numbers (2.01%) just a day before the MPC’s decision to maintain status quo, has raised concerns amongst analysts, as to the effectiveness of monetary policy tools to alleviate fiscal problems in Nigeria.

The markets are also wary about the MPC’s call on the CBN to restrict the amount of T/Bills that banks can buy or hold in their balance sheets. The further call on banks to increase their total lending at a time when NPLs are still way above the limit of 5% is to push moral suasion of banks by the CBN to the edge.

In the attached slides, you will find an analysis by Bismarck Rewane and the FDC Think Tank on Channels TV yesterday. In the presentation, he attempts to differentiate between principles of voodoo economics and orthodox economics in evaluating the likely impact of the MPC’s decision on the economy in general, corporate bodies and consumers.

Do enjoy your read…