Only if an economy is as simple as taught in classrooms. What happens when an expected result is not forthcoming or insufficient?

Is that a rebuttal to his immoral life story?
He couldn't have chosen a better time!
Fact is no one is buying that, atlist not until he reacts to the stories making the round concerning him

oladayo042: Only if an economy is as simple as taught in classrooms. What happens when an expected result is not forthcoming or insufficient?

oladayo042: Only if an economy is as simple as taught in classrooms. What happens when an expected result is not forthcoming or insufficient?

That's why the context matters a lot in implementing policies. What works in Taiwan might not neccessarily work in Nigeria. There is no such thing as proven fact in social science so classroom economics has to be implemented within local context.

djon78: Very wonderful intelectual piece. I personally think OBJ meant good for this country during his regime by banning the importatn of lots of things.

What we need now is for massive investment in infrastructure like power, roads cos this will help our economy to develop as a result of reducution in the cost of production. The earlier this is done the better because in the coming decade global dependence on oil will drop greatly, and if we dont use our opportunity now, am afraid to say it will come to hunt this nation.

Banning without openin up industries to replace them not even good incentives to encourgae the mkt.Foget Govt for now

free2ryhme: Who is sanusi

the man caught with the some body's, wife

What appears is that, even with all the prudence rhetoric, according to SLS, government fiscal prudence is not prudent enough. Obviously, there seems to be a disconnect between our fiscal and monetary policy coordination but that is a discussion for another day,

I totally agree on this. I think this is the answer to the whole problem.There is obviously a disconnect btw the fiscal policy of the FG and the monetary policy coordination of the CBN.

You are forcing us to tighten our belts by mopping up and squeezing the little money within the economy while govt embarks on reckless spending spree.This is why politicians and govt officials are the richest people you have around today.I do not thnk ant economy can grow with this dysfunctional system.

The govt if they are really serious shuld do evry thng to allign the two policies so we can hav meaningful devt.

[size=18pt]sanusis policies made me the billionaire i am today and i would support him to the very end.poor men should
go to hell with there poverty.i hate poor men[/size]

I've always said the biggest stumbling block to growth is access to capital. In the end, it takes capital to make capital. Apart from the manufacturing sector, the services sector should be a large contributor to the economy, much more than it is now. Lets remember that America itself is an import based economy. Retail, real estate, creative industries which are not necessarily power intensive industries need capital to grow.

I think that the gains that will be made in the long run from increased access to credit offset any immediate pains. Imagine the thousands of companies like Jumia & Konga that haven't been started because of lack of access to credit? It is imperative that the MPR be reduced. What we will need is a strong and determined President to ensure that reforms are driven so that the Banks actually increase lending after such reforms are made.

Am not an economist but I learnt the Ghanians tried the devaluation thing, any idea about how it is working for them? I learnt recently that the Chinese economy still attract more foreign investments than it invests abroad shouldn't we be rigorously pursing such investments

In my opinion, I think SLS should reduce the MPR for industrialists who need cheap loans but for him to do this there must be an agreement with the FG that 70% of its expenditure will be on infrastructure and nation building for maybe 10years. Within that period 10 years, the value of naira will depreciate and thereby causing inflation especially on imported goods. I believe that as a result of improved infrastructure, the local made goods will be relatively cheaper than the imported ones thereby discouraging the demand for imported goods and encouraging the demand for local made goods. At this time, the Nigeria manufacturing sector will experience a significant turn around due to the increase in the demand of goods. The manufacturing sector will easily grow due to the low MPR hence providing employment for the citizens. At the end of the 10 year, the nation's infrastructure should be much better, so the manufacturing sector will be fully fit to directly compete with the foreign market, and then CBN can gradually increase the MPR until the market is stabilized.

As easy as this looks, there are big challenges.
1. Politics: Nigeria is not a politically stable nation, policies change in every government.
2. Corruption: Nigeria infrastructural projects are always used as a means of embezzling public funds.
3. Sub-standard project: Nigeria infrastructures are not always built to good quality standard, while those built to standard are always over used and thereby they fall apart within a short period.

yhemster: In my opinion, I think SLS should reduce the MPR for industrialists who need cheap loans but he do this there must be an agreement with the FG that 70% of its expenditure will be on infrastructure and nation building for maybe 10years. Within that period 10 years, the value of naira will depreciate and thereby causing inflation especially on imported goods. I believe that as a result of improved infrastructure, the local made goods will be relatively cheaper than the imported ones thereby discouraging the demand for imported goods and encouraging the demand for local made goods. At this time, the Nigeria manufacturing sector will experience a significant turn around due to the increase in the demand of goods. The manufacturing sector will easily grow due to the low MPR hence providing employment for the citizens. At the end of the 10 year, the nation's infrastructure should be much better, so the manufacturing sector will be fully fit to directly compete with the foreign market, and then CBN can gradually increase the MPR until the market is stabilized.

As easy as this looks, there are big challenges.
1. Politics: Nigeria is not a politically stable nation, policies change in every government.
2. Corruption: Nigeria infrastructural projects are always used as a means of embezzling public funds.
3. Sub-standard project: Nigeria infrastructures are not always built to good quality standard, while those built to standard are always over used and thereby they fall apart within a short period.

Very valid points raised. No nation can develop without good coordinated planning. A 10 year infrastructural development strategy will not only be good in the for Businesses on the long run but the benefit to the economy in terms of employment generation and multiplier effect cannot be over emphasised.

Will our politics and corruption allow this? A multi million dollar question

ewet:

I totally agree on this. I think this is the answer to the whole problem.There is obviously a disconnect btw the fiscal policy of the FG and the monetary policy coordination of the CBN.

You are forcing us to tighten our belts by mopping up and squeezing the little money within the economy while govt embarks on reckless spending spree.This is why politicians and govt officials are the richest people you have around today.I do not thnk ant economy can grow with this dysfunctional system.

The govt if they are really serious shuld do evry thng to allign the two policies so we can hav meaningful devt.

This is a failure of purposeful leadership. It is only the leader that can foster efficient and productive coordination of policy in an ego driven environment like Abuja is.

lammie01:

This is a failure of purposeful leadership. It is only the leader that can foster efficient and productive coordination of policy in an ego driven environment like Abuja is.

I do not thnk GEJ hs the damnest idea on hw to go abt this!

Youngzedd:

Stay clear, we economists are discussing.

You will understand the terms when you grow lol.

Economist my a$$ can u even define economics

Youngzedd: Typing.....

... Is this what u call discussion

djon78: Very wonderful intelectual piece. I personally think OBJ meant good for this country during his regime by banning the importatn of lots of things.

What we need now is for massive investment in infrastructure like power, roads cos this will help our economy to develop as a result of reducution in the cost of production. The earlier this is done the better because in the coming decade global dependence on oil will drop greatly, and if we dont use our opportunity now, am afraid to say it will come to hunt this nation.

Restriction of imports if done in a strategic manner is good for a nations development. For Nigeria, for it to be successful, a west African coordinated approach has to be mapped out. This is where our foreign policy should be hinged upon. We should be flexing our economic strength in the West African sub continent by restricting west African imports and strengthening trade within. If this is not done, imports restrictions will only benefit Togo, Niger, Chad and Benin Republic.

Also if restrictions are placed on imports, and there is no corresponding strategic approach to industrial policy we will not benefit as a nation in terms of real developmental progress. Only a few billionaires like Aliko would.

ewet:

I do not thnk GEJ hs the damnest idea on hw to go abt this!

Well, then we are in for a continuous rough ride till 2015. There cannot be any meaningful developmental impact without proper coordination.

An educative piece, good recommendations most especially that of creating Developmental banks for each geopolitical zone to reflect the needs of particular region. Nigeria can be great and indeed a leader of Africa.

mrsolutionm: Story story toriee

this is the reason why d old men sitting on the future of this country ll continue to dominate nd distroy our economy when youth lik u can't read an article and develop on t to build ur future.I cry for the future of this country which U belong to

kacyfine: this is the reason why d old men sitting on the future of this country ll continue to dominate nd distroy our economy when youth lik u can't read an article and develop on t to build ur future.I cry for the future of this country which U belong to

It is quite a shame that a 2 page intellectual article becomes an herculean task for some to read. How do we understand what our leaders are doing wrong if we fail to read. The older generation had a strong reading ability and culture, our generation is indeed lost with these sort of youths.

Lagosboy:

Restriction of imports if done in a strategic manner is good for a nations development. For Nigeria, for it to be successful, a west African coordinated approach has to be mapped out. This is where our foreign policy should be hinged upon. We should be flexing our economic strength in the West African sub continent by restricting west African imports and strengthening trade within. If this is not done, imports restrictions will only benefit Togo, Niger, Chad and Benin Republic.

Also if restrictions are placed on imports, and there is no corresponding strategic approach to industrial policy we will not benefit as a nation in terms of real developmental progress. Only a few billionaires like Aliko would.

we have something other countries in the sub-region don't have the population (170m) the funniest thing we haven't buttressed more is that, most of the imports done into Nigeria come from cotonou and togo they rely on us and make the best use of it, some countries will naturally die if we don't import from them, the only challenge i see is that our economy is mono-inclined, but let us look at this picture, imagine if our government encouraged toyota to establish an assembly plant, with a bait *that all taxi's used in Nigeria would be a specific brand of toyota*, it would create jobs directly, then imagine them opening car repair garages all over Nigeria for the maintenance of these cars, standardization of maintenance, imagine the training these unskilled and skilled people would get that would create more employment then agriculture, across Nigeria, and then the west African sub-region, imagine a restriction on importation of components parts of telecommunication items such as memory cards, phone chargers the casing of phones, phone jackets, etc while they allow for the importation of the core components of the phones, imagine the textile industries receiving the same change, imagine the economic revolution, yes they insist the cost of production is a very pertinent issue, but if we could have industrial clusters why not if not, where landlords would not charge manufacturers cut throat costs for rentage, but when people come together they can contribute funds for the purpose of power generation, if the loans are more flexible and industrial clusters are developed imagine me and my organization having funds for 10-15years at 5% interest with a flexible repayment, while the borrowers do the job coming to inspect to see how they could help me if things are not working well by introducing me to other customers that may need my services that is what they call a revolution, and this involves selling the dream to the larger Nigerian society. i think i talk to much and these group of people don't have it they are just lost.

okeymadu: Dear OP, you made quite a number of point and stayed in between the most ideological policies. I will make a brief analysis of what you said and why the CBN current moves tend to be sensible given the times.

MPR - some have argued that the MPR should be lowered and I believe you seems to support this assertion. But come to think of it: Commercial banks are not going to open their vaults for most manufacturers. They prefer trades which are quick wins. So, lowering the MPR won't change this. You may check history and justapose periods of lower MPR to commercial banks lending to the real sectors of the economy.

Infrastructure - this is where I believe government should begin to seriously tackle. Recent interventions in this aspect have not yielded commensurate result.

Development Banks for each state - we both know that this is not workable. Do you know how much will be spent on overhead for the proposed banks? Let's instead empower the existing DFIs and broaden their scope.

I'm presently typing from phone and as such won't be able to go into more details. However, the article is a good intellectual piece.

Bro I support ur opinion bt thr are issues here we must point out
1. For infastructural projects like power government must flex its expenditure arm so if sls was eXpecting govt to follow suit in his contractionary monetary policy he must be a joke.
2. Since I became a student of economics govt have establish different bridge banks to intermediate or fastrack growth of a sector in line with their objective eg boi, nacreb even give commercial banks access to some kind of intervention funds. The question is how many trickles down to the real sector. My brother you will be alarmed that it ends up with portfolio biz men
3. How can u ask banks to lend, with the uncertain biz climate in the country abi with the character of most biz men in nigeria that see bank money as their share of national cake
4. Pls tell me how many sound policy that has worked in nigeria. Smh
There was this banking model developed in nigeria, my lecturer affirmed its used in harvard to teach student but as we speak the loan has gone hard core.

Dblack:

Bro I support ur opinion bt thr are issues here we must point out
1. For infastructural projects like power government must flex its expenditure arm so if sls was eXpecting govt to follow suit in his contractionary monetary policy he must be a joke.
2. Since I became a student of economics govt have establish different bridge banks to intermediate or fastrack growth of a sector in line with their objective eg boi, nacreb even give commercial banks access to some kind of intervention funds. The question is how many trickles down to the real sector. My brother you will be alarmed that it ends up with portfolio biz men
3. How can u ask banks to lend, with the uncertain biz climate in the country abi with the character of most biz men in nigeria that see bank money as their share of national cake
4. Pls tell me how many sound policy that has worked in nigeria. Smh
There was this banking model developed in nigeria, my lecturer affirmed its used in harvard to teach student but as we speak the loan has gone hard core.

I think the Author made reference to regional or state development banks as a panacea to low penetration of funds to actual real SMEs. BOI sitting in Abuja will continue to be hijacked by briefcase business men like Jimoh Ibraheem who diverted 40 billion aviation intervention funds.

The issue is not a simple black and white option but what is sure is that what is been done at the moment is not working and a change is required.

lammie01:

I think the Author made reference to regional or state development banks as a panacea to low penetration of funds to actual real SMEs. BOI sitting in Abuja will continue to be hijacked by briefcase business men like Jimoh Ibraheem who diverted 40 billion aviation intervention funds.

The issue is not a simple black and white option but what is sure is that what is been done at the moment is not working and a change is required.

I beg to differ on your reference to BOI, I am a beneficiary of Dangote funds, though it took the intervention of SLS to assess it, the only challenge is the repayment its crazy we need at least a 10year breather, they are only giving us 2years - look at the cost implication, look at our staff salaries, then consider rentage's on properties where we occupy, as I speak most of us that were given loans, are already getting out of business and folding up, the *BOI* are now looking for how to repossess and sell the equipments they financed I just received a threat call from them also (- the solution longer repayment periods single digit loan interests) further exposure to business opportunities *so they can recover their loans without defaults* the states and the BOI, already have agreements on counter part fundings (50-50) so its available at states the problem is will the state governors allow the people that need the funds have assess to it? Coming to the issue at hand the ministry of aviation has come with aero-tropolis, commerce should come up with industrial cities, like for example if the whole area 1, or Gudu district in abuja could be turned into an industrial area, it would be easier to provide consistent 24/7 power - but because of the level of direction*lessness* they wouldn't do such a thing.

olajide_07:
I beg to differ on your reference to BOI, I am a beneficiary of Dangote funds, though it took the intervention of SLS to assess it, the only challenge is the repayment its crazy we need at least a 10year breather, they are only giving us 2years - look at the cost implication, look at our staff salaries, then consider rentage's on properties where we occupy, as I speak most of us that were given loans, are already getting out of business and folding up, the *BOI* are now looking for how to repossess and sell the equipments they financed I just received a threat call from them also (- the solution longer repayment periods single digit loan interests) further exposure to business opportunities *so they can recover their loans without defaults* the states and the BOI, already have agreements on counter part fundings (50-50) so its available at states the problem is will the state governors allow the people that need the funds have assess to it? Coming to the issue at hand the ministry of aviation has come with aero-tropolis, commerce should come up with industrial cities, like for example if the whole area 1, or Gudu district in abuja could be turned into an industrial area, it would be easier to provide consistent 24/7 power - but because of the level of direction*lessness* they wouldn't do such a thing.

This thread is quite interesting. It has been long I saw a serious intellectual discussion like this on Nairaland. Lol.

I believe we are in the era of cheap funds and long tenor. Take for instance the CBN N500 billion restructuring fund for commercial banks loans to manufacturers and the Power and Aviation Funds. I won't elaborate on this initiative but the beneficiaries will testify how successful it is. This is a typical example of purposeful government interventionist programme handled by CBN-BOI. The model is now being replicated in other African countries.

My challenge is people trying to use text book economics in Nigeria. It doesn't work here. We are living in a country that require special approach something of outlier. This is why no PHD scholar who had not passed through the system had been successful in any national assignment. I'm sorry to say this, the writer of that article won't do well if given the opportunity to lead a financial organisation in Nigeria because his analogies are rooted in textbooks.

Reduce MPR and the naira will fall. Who bears the brunt? The Masses. The manufacturers will now buy their equipment which are usually imported at exhorbitant prices and the spare part as well will be expensive. The cost will now be passed unto the consumers.

Remember Structural Adjustment Programme?

What we should be concerened with now is why is it that we don't have capacity in engineering, science, technology etc. Without these competencies and competent hands investments made in power and infratructures will not yield the desired effect. That is why despite huge allocations for the critical segments nothing is happening. I use this medium to challenge all undergraduates and other students to rise to the occasion and begin to think in direction of application and not theories.

Finally, the quote above is let the quoted know that the loan given by BOI to his company, which he said was going bad, couldn't possible have been influenced by anybody except his proposal. The failure is not because the loan is expensive - you got it for 5% and the tenor is determined by the cashflow you submitted except you have no proper knowledge of your industry before applying and collecting the loan.

I think that goverment is trying. We need to do our bits as youths to grow this country.

Thanks.

quote author=olajide_07]
I beg to differ on your reference to BOI, I am a beneficiary of Dangote funds, though it took the intervention of SLS to assess it, the only challenge is the repayment its crazy we need at least a 10year breather, they are only giving us 2years - look at the cost implication, look at our staff salaries, then consider rentage's on properties where we occupy, as I speak most of us that were given loans, are already getting out of business and folding up, the *BOI* are now looking for how to repossess and sell the equipments they financed I just received a threat call from them also (- the solution longer repayment periods single digit loan interests) further exposure to business opportunities *so they can recover their loans without defaults* the states and the BOI, already have agreements on counter part fundings (50-50) so its available at states the problem is will the state governors allow the people that need the funds have assess to it? Coming to the issue at hand the ministry of aviation has come with aero-tropolis, commerce should come up with industrial cities, like for example if the whole area 1, or Gudu district in abuja could be turned into an industrial area, it would be easier to provide consistent 24/7 power - but because of the level of direction*lessness* they wouldn't do such a thing.[/quote] loans. M

okeymadu:

This thread is quite interesting. It has been long I saw a serious intellectual discussion like this on Nairaland. Lol.

I believe we are in the era of cheap funds and long tenor. Take for instance the CBN N500 billion restructuring fund for commercial banks loans to manufacturers and the Power and Aviation Funds. I won't elaborate on this initiative but the beneficiaries will testify how successful it is. This is a typical example of purposeful government interventionist programme handled by CBN-BOI. The model is now being replicated in other African countries.

My challenge is people trying to use text book economics in Nigeria. It doesn't work here. We are living in a country that require special approach something of outlier. This is why no PHD scholar who had not passed through the system had been successful in any national assignment. I'm sorry to say this, the writer of that article won't do well if given the opportunity to lead a financial organisation in Nigeria because his analogies are rooted in textbooks.

Reduce MPR and the naira will fall. Who bears the brunt? The Masses. The manufacturers will now buy their equipment which are usually imported at exhorbitant prices and the spare part as well will be expensive. The cost will now be passed unto the consumers.

Remember Structural Adjustment Programme?

What we should be concerened with now is why is it that we don't have capacity in engineering, science, technology etc. Without these competencies and competent hands investments made in power and infratructures will not yield the desired effect. That is why despite huge allocations for the critical segments nothing is happening. I use this medium to challenge all undergraduates and other students to rise to the occasion and begin to think in direction of application and not theories.

Finally, the quote above is let the quoted know that the loan given by BOI to his company, which he said was going bad, couldn't possible have been influenced by anybody except his proposal. The failure is not because the loan is expensive - you got it for 5% and the tenor is determined by the cashflow you submitted except you have no proper knowledge of your industry before applying and collecting the loan.

I think that goverment is trying. We need to do our bits as youths to grow this country.

Thanks.

quote author=olajide_07]
I beg to differ on your reference to BOI, I am a beneficiary of Dangote funds, though it took the intervention of SLS to assess it, the only challenge is the repayment its crazy we need at least a 10year breather, they are only giving us 2years - look at the cost implication, look at our staff salaries, then consider rentage's on properties where we occupy, as I speak most of us that were given loans, are already getting out of business and folding up, the *BOI* are now looking for how to repossess and sell the equipments they financed I just received a threat call from them also (- the solution longer repayment periods single digit loan interests) further exposure to business opportunities *so they can recover their loans without defaults* the states and the BOI, already have agreements on counter part fundings (50-50) so its available at states the problem is will the state governors allow the people that need the funds have assess to it? Coming to the issue at hand the ministry of aviation has come with aero-tropolis, commerce should come up with industrial cities, like for example if the whole area 1, or Gudu district in abuja could be turned into an industrial area, it would be easier to provide consistent 24/7 power - but because of the level of direction*lessness* they wouldn't do such a thing. loans. M

Get out of your own bubble of Jonathan arse licking- I can smell it!!! You are telling us to look at other directions rather then in your front, have you forgotten that everything in life is a vicious circle!! we should think about science and engineering and sustain it with our teeth, while saying we should forget SAP, how can you develop, without forcing people too, the average person is a lazy person we don't want to work that's why everybody wants a civil service job where they promote, level and grade them.
Well, let's start like this, a policy was started by the military and continued by the OBJ govt., I think it was by the then, CBN governor felix oguwma., not to sure right now, lets see some of us tried to assess the 5% set aside from the profits of banks, then before the policy was changed, then manufacturers revolving loan scheme, was funded solely by the CBN as a result of the economic engineering of SLS, it is assessed, by the bankers of the manufacturers, meaning you must have been in business for 3years prior to when the loan scheme was introduced, and the collateral range from fixed assets ranging to 150% of the amount being borrowed, secured through the lenders bankers, working capital would still be provided by your bankers, you had to belong to the manufacturers association of nigeria (MAN), which would take 6months prior registration a certificate would be issued which takes another 6mths before you can have access to these funds with the yearly payments done, - now a form is supposed to be picked up at the customers bank Preferably a commercial bank, and then processed on behalf of the customer by their bankers with all the documents, believe you me N500billion was made available and virgin nigeria got N40b(jimoh ibrahim- egbon forgive me), Arch., barnabas germade group got so much, peugeot got N1b, transcorp, I have a dorsier of how the money was shared, small organisations were sidelined and their was a case of selective disbursement because the BOI even confirmed that the money was resident with the banks and approvals were only given when all these criteria were fulfilled (the nigerian factor) now when making reference to text book economics talk to NOI, making reference to these issues of wrong or bad proposals you should have asked if what I/we gave them was accepted, for your information they collapsed a 5-7year repayment cashflow plan into 1yr 6months that the loan, we assessed/ collected was a micro-credit loan and these kind of loan are the loans, small scale organisations are given, I wouldn't want to explain more because, I see from the way you typed that you haven't experienced the challenges of assessing finance, I started looking for this loan for 5years prior to assessing it then, look at this, Dangote engineered creating employment through his foundation and the government was just used as a tool, in fact, I was at Dangote office stallion house prior to the BOI -FG grabbing it off Dangote shelf, I can talk more but let's leave it- talking about economics of it, looking at it I believe nigerian's, are more matured and if you think information is not sufficient, about how to handle things you may be wrong, think of this we nigerian's want to listen to nigerian music, we are more informed now and SAP would work, just look around you

okeymadu:

This thread is quite interesting. It has been long I saw a serious intellectual discussion like this on Nairaland. Lol.

My challenge is people trying to use text book economics in Nigeria. It doesn't work here. We are living in a country that require special approach something of outlier. This is why no PHD scholar who had not passed through the system had been successful in any national assignment. I'm sorry to say this, the writer of that article won't do well if given the opportunity to lead a financial organisation in Nigeria because his analogies are rooted in textbooks.

Reduce MPR and the naira will fall. Who bears the brunt? The Masses. The manufacturers will now buy their equipment which are usually imported at exhorbitant prices and the spare part as well will be expensive. The cost will now be passed unto the consumers.

Remember Structural Adjustment .

Bros are you sure you read this article at all before posting? If you did, did you miss this ?

An economic research has shown that, in principle, inflation rate when below 40 per cent has no real bearing on economic growth of a country. This research was published in 1995 and interestingly by neo-liberal economists, Michael Bruno, a former World Bank chief economist and William Easterly, also of the World Bank. It was further argued by them that below 20 percent, higher inflation is often associated with higher growth. It is therefore not surprising to note that South Korea, during its miracle growth years of the 1960s and 1970s, had inflation rates of between 17.5 per cent and 20 per cent. This is not to say that inflation is good, no! But, moderate inflation CAN be good for the economy if it is induced by higher productive spending which spurs economic activities and growth. I believe it is from this perspective others have suggested that the current tight monetary policy should be eased and obsession with inflation should be given way for expansionary policies – increased government spending – to stimulate development.

This view appears to be correct in principle and also theoretically grounded in the context of Keynesian economics. However, development and economic theory have to be put into the local context when postulating policies - thinking globally, acting locally - let us look at this scenario.

If monetary policy is eased, cheaper money should be available on the market, coupled with government spending and therefore enough liquidity in the system which should propel economic growth. The assumption here is that a relaxed monetary policy will enable producers borrow and enhance banks lend to the real sector of the economy. However, in the context of the local reality – import dependent economy- excess Naira would chase the dollar and also chase lesser goods which will consequently lead to inflation and a run on the value of the Naira as well as needless depletion of the foreign reserves. The problem of weaker Naira emerges. A contrary argument by a segment of the economy – manufacturers - might be that cheaper credit to them will enable growth of the sector and job creation to tackle pervasive unemployment in the economy, hence, the benefit outweighs the cost or harm.

This is one side of the story; a closer look will be to compare the percentage of manufacturing in the nations GDP to the percentage of trades of foreign finished goods which dominates the informal economy outside tax bands and revenue collection. Manufacturing only represents 0.5 per cent of Nigeria’s GDP. If one takes out the 20 odd percent oil share of the GDP, the remaining 70 odd percent which includes agriculture, services, plus the informal economy is wholly dependent on foreign produced inputs.

Moreover, most manufacturers have to still import inputs for their industry. Thus, a weaker Naira would translate into higher cost of production which will ultimately be transferred to the Nigerian consumers. Another contrary argument could be that this is a sacrifice that will pay off in the long run as it will help develop Nigeria’s productive and industrial capability. I completely agree with this view, and this sacrifice is what propelled the East Asian economies to success; however, it is only correct in theory and not within the CURRENT Nigerian context.

Obviously the author of this article acknowledged the dangers of lowering the MPR. He quoted theories and drew attention to pitfalls in implementing in the context of Nigeria. This sort of analysis is a mile better than the current managers of our economy.

What a great intellectual analysis. I had to register on NL because of the article.

I think SLS is right in his approach to monetary policy. Is this the man GEJ wants force out?

Rather than force him out he should be making sure there is a coordinated approach to policies between Iweala, Sanusi and Alison Madueke.

It will surely take another 10 years to have good infrastructure thats provided we have sane people at the presidency.

I think our monetary policy was shaped to accommodate Nigerian money market as well as other aspect of the Nigerian economy...