Uncategorized
Why The Economy May Not Be Responding Fast EnoughBy: A G Abubakar
The nexus of monetary policy is “inflation.” It ties in prices, employment, interests, and exchange rates among other variables. Controlling inflation has literally come to define the functions of most central/reserve banks around the world. Incidentally, the phenomenon of inflation in an economy has a direct bearing on national output and productivity. Inflation can not be kept down so long as the national output of goods and services over the decade has been lacklustre.
This is going by such figures as the nation’s GDP (less than 2.5% decade average), the negative balance of trade, and a series of devaluation and manufacturing capabilities dwindling by the day. All are happening against the backdrop of serious challenges being encountered in the agricultural sector on account of insecurity and climatic factors. Add the annual population growth of 2.6% that is higher than the GDP, and the economic challenges, in the short run, become more intricate.
Forty per cent of farmers across such states as Borno, Yobe, Adamawa, Taraba, Benue, Katsina, Zamfara, Sokoto, Kebbi, and to lesser extent Niger and Kaduna can not successfully till the land. It’s obvious the implications on this development on labour and availability of food, and even agro raw materials.
In a situation like this, the CBN macroeconomic tools MPR, CRR, OMO, LR, Fx Interventions, etc) can only go as far. There is a minimum threshold of national output that could make such tools effective. It’s common sense.
Currency devaluation in low-producing economy amounts to net economic loss expressed in galloping and externaly induced inflation. As for food inflation, the nbs has this to say “After 19 straight months of a fiery inflationary surge, Nigeria’s inflation turned the corner in July, decelerating to 33.4% from 34.2% a month before…Interestingly food inflation slowed by1.34%…” a drop that is greater than the difference between the 33.4 and 34.2 rates. Many factors outside policy might have contributed to this marginal development, especially the arrival of some new food items in the market, plus the “improved” access to inputs.
The devaluation (forex pressure) of the Naira is likely to make this “improvement” unsustainable against the backdrop that the country’s food and beverage bill increased by 30% from the last quarter of 2023 and first quorta of 2024. The nation also expends over 65% of its annual budget on debt service. Devaluation, debilitating debt overhung, and massive imports are strange bedfellows! Economics devalue or float currency to stimulate export by making their products comparatively cheaper, among other factors. Therefore, to float the national currency, which is a euphemism for devaluation, is tantamount to net economic loss. A scenario that could be worsened by being an oil dependant economy.
Oil is under curtail, so devaluation does not affect its demand.
As it were, oil export accounts for around 90% of the nation’s foreign exchange. Therefore, stabilising the exchange rate will largely depend on the curtailment of local demand, which could reasonably be achieved through boosting national output, especially food and agro raw materials. A policy strategy that has yet to take root. And it may not, unless backed by enormous political will.
The fact is that the current harsh economic environment and the various security challenges across the land pose serious drawbacks to macroeconomic policies. But willy nilly, they have to be addressed first to ensure both food self-sufficiency and security. This is yet to be seen in realistic terms. China, India, Brazil, etc, leverage their initial take-off via national food sufficiency and the agro allied industries.
The Brazilian coffee, and sugar, the Indian spices, and Basmati rice and the Chinese noddles and cusines are now major global exports after satisfying local demand. They are testaments to the power of homegrown economic models based on local factor endowments, especially in agriculture and SMEs.
Government should pay more attention to this economic model as it accords the IMF/WB a tangential recognition for “peace to reign.” The IMF/WB and other externally prescribed “structural adjustment programme” (SAP) more often than not, place more premium on National Account Book balance/health rather than the individual economic health of the citizens. The capacity to descerne the conflicts of interest determines the success or otherwise of government’s reforms during periods of serious economic downturn.
A.G.Abubakar agbarewa@gmail.com
By Fabian Apechihin
The 2026 Constitution Amendment Bill has moved to the state level following its consideration by the National Assembly, paving the way for state legislatures to consider the proposed amendments.
The development comes amid renewed attention on constitutional reform and ongoing discussions over proposed changes to Nigeria’s governing framework.
Meanwhile, the House of Representatives has defended FCT Minister Nyesom Wike over allegations surrounding borrowing by the Federal Capital Territory Administration.
House spokesperson Akin Rotimi Agbese, speaking in an interview with Channels Television, rejected claims that Wike had undertaken borrowing without the knowledge or approval of the National Assembly.
Agbese said the FCT minister could not independently create a sovereign borrowing obligation, stressing that public borrowing is subject to constitutional, statutory and administrative procedures.
“Wike has committed no infraction in borrowings. There is no basis for the allegation that he has been borrowing money behind the back of the National Assembly,” Agbese said.
He explained that borrowing to finance infrastructure was not unlawful where the required approvals and procedures had been followed.
“Borrowing for infrastructure development is not unlawful in itself, provided the prescribed approvals and procedures are followed,” he added.
The House spokesperson further argued that an increase in the FCT’s debt profile should not automatically be interpreted as evidence of illegal borrowing, citing the scale of infrastructure projects being undertaken in Abuja under Wike.
According to Agbese, the key issue is whether the appropriate approvals were obtained for specific borrowing transactions, rather than simply whether the FCT’s overall debt profile has increased.
The comments come as scrutiny continues over public borrowing, infrastructure financing and the legal procedures governing government debt at both the federal and sub-national levels.
By Fabian Apechihin
The 2026 Constitution Amendment Bill has moved to the state level following its consideration by the National Assembly, paving the way for state legislatures to consider the proposed amendments.
The development comes amid renewed attention on constitutional reform and ongoing discussions over proposed changes to Nigeria’s governing framework.
Meanwhile, the House of Representatives has defended FCT Minister Nyesom Wike over allegations surrounding borrowing by the Federal Capital Territory Administration.
House spokesperson Akin Rotimi Agbese, speaking in an interview with Channels Television, rejected claims that Wike had undertaken borrowing without the knowledge or approval of the National Assembly.
Agbese said the FCT minister could not independently create a sovereign borrowing obligation, stressing that public borrowing is subject to constitutional, statutory and administrative procedures.
“Wike has committed no infraction in borrowings. There is no basis for the allegation that he has been borrowing money behind the back of the National Assembly,” Agbese said.
He explained that borrowing to finance infrastructure was not unlawful where the required approvals and procedures had been followed.
“Borrowing for infrastructure development is not unlawful in itself, provided the prescribed approvals and procedures are followed,” he added.
The House spokesperson further argued that an increase in the FCT’s debt profile should not automatically be interpreted as evidence of illegal borrowing, citing the scale of infrastructure projects being undertaken in Abuja under Wike.
According to Agbese, the key issue is whether the appropriate approvals were obtained for specific borrowing transactions, rather than simply whether the FCT’s overall debt profile has increased.
The comments come as scrutiny continues over public borrowing, infrastructure financing and the legal procedures governing government debt at both the federal and sub-national levels.
By Fabian Apechihin
The Peoples Democratic Party (PDP) has reaffirmed its intention to contest the 2027 presidential election despite the decision of Federal Capital Territory Minister, Nyesom Wike, to support President Bola Ahmed Tinubu’s re-election bid.
The party said Wike’s decision was personal and did not alter its position to participate in the presidential election with its candidate, Senator Sandy Onor. PDP National Publicity Secretary, Jungudo Haruna Mohammed, made the clarification on Wednesday.
According to the party, a recent conversation between Wike and Onor should not be interpreted as a political negotiation between the minister and the PDP.
“He told Nigerians that Sandy is his friend. And they only had a friendly discussion within the umbrella of friendship. So, that is just a personal discussion between him and his friend,” Mohammed said.
He added that Wike’s support for Tinubu did not prevent the PDP from fielding candidates for the presidential, governorship and legislative elections.
Wike had earlier clarified that his support in 2027 was specifically for Tinubu’s presidential re-election and did not amount to an agreement that the PDP would withdraw from other electoral contests. He also said he never promised that the PDP would abandon its candidates for governorship, National Assembly and State House of Assembly elections.
“I said I will support the President from day one. I never told Mr President I will join APC,” Wike said.
The minister also maintained that his proposed Rainbow Coalition was not an arrangement with the All Progressives Congress (APC), but rather a platform through which politicians from different parties could mobilise support for Tinubu’s re-election.
The issue has generated disagreement with some APC governors, who have expressed concern about a political arrangement that could affect the party’s candidates at other levels.
APC Progressive Governors’ Forum Chairman, Hope Uzodinma, said the governors would not support any alliance or arrangement that could weaken the APC or adversely affect its candidates.
Meanwhile, APC presidential campaign council spokesperson Ima Niboro has urged Wike and APC governors to end their public exchanges and concentrate on political mobilisation.
“When I said tone down the rhetoric, I do not mean stop working. Stop talking, go and work,” Niboro said.
He urged political leaders to strengthen their grassroots structures and engage directly with voters rather than continue exchanging statements in the media.
“All this shouting is not taking anybody anywhere. Go and work. Go and establish your authority on your political base,” he said.
HONOURABLE JAFAARU YAKUBU COMMISERATES WITH QATAR OVER THE DEATH OF RULER
2026 Constitution Amendment Bill Moves to States
2026 Constitution Amendment Bill Moves to States
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