blackpanda:


Do you even understand what is being said

You may not but I do

Jflex07:
You be Apc urrchin already, so no matter what Mr Obi says, it must be disputed by you and your fellow zombies.. Which idea has your drug lord tinubu propounded?

Like i said earlier this is an academic discussion intended to interrogate policy issues. It is not about individuals or their various parties.

blackpanda:


Will power to do what exactly Y'all just love generalized empty comments that provide no solution. You rather hold on to fantasies that face reality. How does govt that has no money to pay salaries, then produce petrol for 220million people Smh

Help me ask them Ooo

Betanaija42moro:
Mr. Critic, the only thing you saw in what Peter Obi posted was monetary policy.
You didn't see other plans? Did you consider them at all

Meanwhile other presidential candidates were busy throwing banters and accusations.

Obi is still the best choice

I am not saying Obi is not the best choice rather am only analysing his policy prescription to the Problem of Inflation in Nigeria to see how workable it is in our present day Nigeria.

teeytimi:
Well, I don't know if he has plans for this but the real solution to the current inflation in Nigeria is reduction in cost of production.

This means that inflation is rather a cost push factor than demand pull or just monetary phenomenon.

mycar:

That is where you got it wrong, or better-still, those other parts lie the answers to your question.

Those other factors would Infact conflict with his contractionary monetary policy. This is because contractionary monetary policy simply means increasing interest rate to reduce inflation which in turn reduces Investment and production of goods and services, kills businesses especially SME, creates unemployment, stifle economic growth and finally worsens the incidence of poverty.

kahal29:


Pls kindly elucidate

We need to deflate the economy. If you know where we're coming from, before 2020 pandemic, we closed all our land borders, which put us in a classical position of inflationary pressure, i.e the money in the economy was chasing few available goods.
By 2020 during covid, the govt made a mistake, a knee jerk decision to the projections on the effect of covid on the economy by asking CBN to print more money. It was a mistake. We did not factor in the fact that with our borders locked by over a year then, our inflation numbers were not good and the problem we were facing was on the supply side not demand. CBN has been printing money since then because our Western lenders and even China have all refused to lend us due to our debt servicing burden and revenue problem. As a matter of fact, CBN has printed way beyond what is legally allowed it, which is why they have refused to release an audit report for a while.
In other words, our immediate challenge is how to mop up the excess liquidity we have now. One way this used to happen in our rotten system is through the activity of smugglers. They push so many goods down that are cheap and with that the supply is dealt with. But with the security situation and the border issue, such is already at minimum

So, the macroeconomic managers need to come up with ideas to deflate the economy and mop up all the excess money in circulation since 2020. What makes it worse is next year is an election year. So expect more money in circulation hence more inflation.

kahal29:


I only focused my attention on his policy proposal to the problem of Inflation in Nigeria. Others can take him up on some of the other policy prescriptions.

No, you have to take him on, on every economy point that he has ever made, including drastically cutting down on the cost of government.

Everything he has ever said with regards to boosting the economic health of the nation are inextricably interlinked.

You cannot just criticize one point in isolation, without taking the other points in consideration.

I'm sure he still has more economic policies to dish out as we head to the electioneering season.

I know in the past few weeks, he also talked about stopping the dollar jamboree of politicians who have no known means of earning dollars, to the detriment of investors and businessmen who are employers of labour, but are denied access to dollars needed to run their enterprises, thereby forcing millions of people to the unemployed queue, which inevitably leads to government being denied taxes from people forced out of employment. Vicious cycle.

The Bottom line is that Obi is head and shoulders above Atiku and Tinubu.

I will trust Obi to also increase power generation in Nigeria to boost business productivity and reduce expenses.
And he will bring in the best hands. Cronyism and nepotism will die down

Agboriotejoye:

We need to deflate the economy. If you know where we're coming from, before 2020 pandemic, we closed all our land borders, which put us in a classical position of inflationary pressure, i.e the money in the economy was chasing few available goods.
By 2020 during covid, the govt made a mistake, a knee jerk decision to the projections on the effect of covid on the economy by asking CBN to print more money. It was a mistake. We did not factor in the fact that with our borders locked by over a year then, our inflation numbers were not good and the problem we were facing was on the supply side not demand. CBN has been printing money since then because our Western lenders and even China have all refused to lend us due to our debt servicing burden and revenue problem. As a matter of fact, CBN has printed way beyond what is legally allowed it, which is why they have refused to release an audit report for a while.
In other words, our immediate challenge is how to mop up the excess liquidity we have now. One way this used to happen in our rotten system is through the activity of smugglers. They push so many goods down that are cheap and with that the supply is dealt with. But with the security situation and the border issue, such is already at minimum

So, the macroeconomic managers need to come up with ideas to deflate the economy and mop up all the excess money in circulation since 2020. What makes it worse is next year is an election year. So expect more money in circulation hence more inflation.

Did you say deflate the economy cos the Nigeria economy is already deflated the way it is Ooo. Besides i don't think there is excess money in circulation but what we have is excess money in very few hands which creates the problem of inequality. Peter Obi hammers so much on moving the economy from Consumption to Production and that can only happen by stimulating the economy rather than stifling or deflating it. You stimulate the economy through increased investment and incentives to create new businesses.

kahal29:


Abeg help me ask him Oooo

This is because when you say that you will fight inflation with contractionary monetary policy it means that you have agreed that inflation is a monetary phenomenon i.e inflation is demand pull which in lay man's understanding means too much money in the system chasing few goods and services. However you and I know that this is not the case in Nigeria. There is no enough money circulating in the system in the first place not to even talk of a case of too much money in circulation chasing available goods and services.

No. Your definition of inflation is right but how you understand it is wrong. In a price equilibrium environment, the amount of money in circulation should be commensurate with the productivity in the system. You don't create money or wealth by just printing in a normal economy. Rather, you can even devalue your currency and your money simply jumps up.
Nigeria is having very low production. That's been a fact for a while. This govt then closed border, more loss of supply. Lastly, CBN started printing money. Increase in demand.
So, the inflation is monetary. Too much money is in circulation while there's no productive activity to match it.
Have you checked the inflation figure? 17%!!
We simply need to contract demand. Or we either encourage our "importers" to go back to business. If not the inflation on the runway will soon enter express on the way to Zimbabwe.

OfoIgbo:


No, you have to take him on, on every economy point that he has ever made, including drastically cutting down on the cost of government.

Everything he has ever said with regards to boosting the economic health of the nation are inextricably interlinked.

You cannot just criticize one point in isolation, without taking the other points in consideration.

I'm sure he still has more economic policies to dish out as we head to the electioneering season.

I know in the past few weeks, he also talked about stopping the dollar jamboree of politicians who have no known means of earning dollars, to the detriment of investors and businessmen who are employers of labour, but are denied access to dollars needed to run their enterprises, thereby forcing millions of people to the unemployed queue, which inevitably leads to government being denied taxes from people forced out of employment. Vicious cycle.

The Bottom line is that Obi is head and shoulders above Atiku and Tinubu.

I will trust Obi to also increase power generation in Nigeria to boost business productivity and reduce expenses.
And he will bring in the best hands. Cronyism and nepotism will die down

I focused on that because his policy prescription to the Problem of Inflation in Nigeria would conflict with those other things he is saying. It is simple economics. In the first place what is contractionary monetary policy? This simply means increasing interest rate to reduce inflation which in turn reduces Investment and production of goods and services, kills businesses especially SME, creates unemployment, stifle economic growth and finally worsens the incidence of poverty.

However, Peter Obi talks so much about moving the economy from Consumption to Production and that can only happen by reducing interest rate which in turn increases investment and production, creates new businesses, jobs and employment which drives away poverty.

Obi is a bad economist. I laughed so hard when I read the statement on his Twitter handle.

Why can't he just keep quiet for sometime? I pity this country if we mistakenly elect another wrong leader.

It is much easier to talk or write a policy but the effectiveness and implementation of the policy matters a lot.

kahal29:


Did you say deflate the economy cos the Nigeria economy is already deflated the way it is Ooo. Besides i don't think there is excess money in circulation but what we have is excess money in very few hands which creates the problem of inequality. Peter Obi hammers so much on moving the economy from Consumption to Production and that can only happen by stimulating the economy rather than stifling or deflating it. You stimulate the economy through increased investment and incentives to create new businesses.

The money supply is inflated. I already explained to you how. What do you mean by economy is deflated? Since after covid, we've been posting GDP figures of 3% and above. That's not a sign of a deflated economy given that we've had two recessions previously and the present govt have never boasted of GDP above 2% until now. What I'm pointing out to you is that the printing of money is what is leading the inflationary trends not the existence or not of goods. You can battle that by increasing production which we can't presently due to our infrastructural problem or increase import which does not look good either with our abysmal forex rates (except of course you're ready to encourage our "importers" deflate demand which PO is talking about. Obi is actually right on this one given the reasons for this present malaise.

Agboriotejoye:

No. Your definition of inflation is right but how you understand it is wrong. In a price equilibrium environment, the amount of money in circulation should be commensurate with the productivity in the system. You don't create money or wealth by just printing in a normal economy. Rather, you can even devalue your currency and your money simply jumps up.
Nigeria is having very low production. That's been a fact for a while. This govt then closed border, more loss of supply. Lastly, CBN started printing money. Increase in demand.
So, the inflation is monetary. Too much money is in circulation while there's no productive activity to match it.
Have you checked the inflation figure? 17%!!
We simply need to contract demand. Or we either encourage our "importers" to go back to business. If not the inflation on the runway will soon enter express on the way to Zimbabwe.

Nobody is talking about printing money or not printing money.

Agreed the Nigerian economy presently suffers from low production and the issue is that you want to increase Production and my question is how do you do it?

Is it by increasing interest rate i.e contractionary monetary policy?

rolams:
Obi is a bad economist. I laughed so hard when I read the statement on his Twitter handle.

Why can't he just keep quiet for sometime? I pity this country if we mistakenly elect another wrong leader.

It is much easier to talk or write a policy but the effectiveness and implementation of the policy matters a lot.

This is partly what am saying. His economic solution to the Problem of Inflation in Nigeria cannot work because this what the CBN has been doing over the years without any tangible result.

kahal29:


This is partly what am saying. His economic solution to the Problem of Inflation in Nigeria cannot work because this what the CBN has been doing over the years without any tangible result.

Yes ooo. It will continue to halt economic progress.

kahal29:



I focused on that because his policy prescription to the Problem of Inflation in Nigeria would conflict with those other things he is saying. It is simple economics. In the first place what is contractionary monetary policy? This simply means increasing interest rate to reduce inflation which in turn reduces Investment and production of goods and services, kills businesses especially SME, creates unemployment, stifle economic growth and finally worsens the incidence of poverty.

However, Peter Obi talks so much about moving the economy from Consumption to Production and that can only happen by reducing interest rate which in turn increases investment and production, creates new businesses, jobs and employment which drives away poverty.

You keep repeating the bolded definition. You make it seem like contractionary monetary policy is a poison you administer to a country you don't like to kill it.
The policy exists in economic textbooks for a reason. Don't be a false intellectual. If "increasing interest rates to reduce Investment and production of goods and services, kill businesses especially SME, create unemployment, stifle economic growth and finally worsen the incidence of poverty" is the only reason contractionary policy exists, I doubt you will find it in any economic text or study because it will be akin to teaching a doctor how to commit murder. The main purpose of contractionary policy is to battle inflation. Do we have inflation? Hell yeah!! Can we afford to contract? Given our past three GDP figures? Of course!!
What do we start to lose? We're not going to get production up anyway with the poor infrastructure we have so why don't we just drop inflation and get our supply issues resolved before we start thinking of increasing demand?

kahal29:


This is partly what am saying. His economic solution to the Problem of Inflation in Nigeria cannot work because this what the CBN has been doing over the years without any tangible result.

Not true. The CBN has not increased interest rates for a good while. Rather, they've been printing money!!
Get yourself properly educated. You seem to just want to criticize because you don't like Obi not that you understand what he's talking about.

kahal29:


Nobody is talking about printing money or not printing money.

Agreed the Nigerian economy presently suffers from low production and the issue is that you want to increase Production and my question is how do you do it?

Is it by increasing interest rate i.e contractionary monetary policy?

Well, you have to talk about printing money because that's where the inflation is coming from.
The issue of low production existed before this administration yet, we've had single digit inflation since the time of OBJ. GEJ left inflation at 9%.
We need to mop up the excess liquidity caused by the printing of money during covid when there was close to zero production!!
You may not agree with how he intends to do it but to claim we don't need to mop up excess liquidity is being economically dishonest.

Agboriotejoye:

The money supply is inflated. I already explained to you how. What do you mean by economy is deflated? Since after covid, we've been posting GDP figures of 3% and above. That's not a sign of a deflated economy given that we've had two recessions previously and the present govt have never boasted of GDP above 2% until now. What I'm pointing out to you is that the printing of money is what is leading the inflationary trends not the existence or not of goods. You can battle that by increasing production which we can't presently due to our infrastructural problem or increase import which does not look good either with our abysmal forex rates (except of course you're ready to encourage our "importers" deflate demand which PO is talking about. Obi is actually right on this one given the reasons for this present malaise.

Now you coming closer to what we i have been saying that inflation in Nigeria is not just a monetary phenomenon that you solve with contractionary monetary policy. There are so many factors to the problem of Inflation in Nigeria some of which you highlighted in your last paragraph so just reducing it to money supply alone is a simplistic approach to the issue at hand.

Agboriotejoye:

You keep repeating the bolded definition. You make it seem like contractionary monetary policy is a poison you administer to a country you don't like to kill it.
The policy exists in economic textbooks for a reason. Don't be a false intellectual. If "increasing interest rates to reduce Investment and production of goods and services, kill businesses especially SME, create unemployment, stifle economic growth and finally worsen the incidence of poverty" is the only reason contractionary policy exists, I doubt you will find it in any economic text or study because it will be akin to teaching a doctor how to commit murder. The main purpose of contractionary policy is to battle inflation. Do we have inflation? Hell yeah!! Can we afford to contract? Given our past three GDP figures? Of course!!
What do we start to lose? We're not going to get production up anyway with the poor infrastructure we have so why don't we just drop inflation and get our supply issues resolved before we start thinking of increasing demand?

That it exist in economic textbook does not mean it works for everybody. It can work in developed economies but certainly not in Nigeria.

Agboriotejoye:

Not true. The CBN has not increased interest rates for a good while. Rather, they've been printing money!!
Get yourself properly educated. You seem to just want to criticize because you don't like Obi not that you understand what he's talking about.

Are you for real? They just did few months ago maybe you didn't take note

https://www.premiumtimesng.com/news/headlines/543686-updated-cbn-raises-interest-rate-again-second-time-in-2022.html

kahal29:


That it exist in economic textbook does not mean it works for everybody. It can work in developed economies but certainly not in Nigeria.

It can work anywhere. Economic texts are not only for developed economies. If Zimbabwe had adopted it maybe they won't be where they are. Ghana once did.
Nigerians are too addicted to spending, you don't want anything to touch your sweets.
Well, economic reality shows that contraction might be a way out of the problem this present clueless govt pushed us

Agboriotejoye:

It can work anywhere. Economic texts are not only for developed economies. If Zimbabwe had adopted it maybe they won't be where they are. Ghana once did.
Nigerians are too addicted to spending, you don't want anything to touch your sweets.
Well, economic reality shows that contraction might be a way out of the problem this present clueless govt pushed us

Hahahaha

The economy is already contracted any further contraction will send more people below the poverty line.

kahal29:


Now you coming closer to what we i have been saying that inflation in Nigeria is not just a monetary phenomenon that you solve with contractionary monetary policy. There are so many factors to the problem of Inflation in Nigeria some of which you highlighted in your last paragraph so just reducing it to money supply alone is a simplistic approach to the issue at hand.

No. Inflation in Nigeria presently is monetary. CBN had been printing money like there's no tomorrow

kahal29:


Are you for real? They just did few months ago maybe you didn't take note

https://www.premiumtimesng.com/news/headlines/543686-updated-cbn-raises-interest-rate-again-second-time-in-2022.html

Well, it seems the CBN agrees with Obi then. Check from 2015 to now. CBN has been maintaining almost steady MPR.

kahal29:


Hahahaha

The economy is already contracted any further contraction will send more people below the poverty line.

Check the GDP figures since covid. We've had nothing less than 3%
So where's your evidence of economic contraction

Obi is really really dumb, the man is just too dull.

Where did he get this foolish idea from?

This is done when you have an economy/GDP that is growing too fast and you must slow it down to control inflation, the opposite is the case in Nigeria, our economy is not growing too fast and we don't have too much money in circulation to mop up.

When you do a Contractionary monetary policy, you increase interest rates which increase the cost of borrowing for companies and consumers which will definitely kill off our economy because you can not borrow money to run your business and when you do, the interest is so high that you won't be able to pay.

You sell off government bonds and securities which won't be in our favor.

This fool is prescribing headache medicine for stomach pain.

What we need is an expansionary policy, the opposite of what this ignorant village clown is talking about.

They need to beg this fool to stop talking because this is really embarrassing.

The primary purpose of contractionary monetary policy is to make it harder for companies and consumers to borrow and spend money and, in turn, halt inflation.

Will this man also tell Nigerians and companies that with this policy, they won't be able to borrow to grow their business or even spend money?

This policy is used mainly to slow down an economy that is growing too fast and out of control.

OMG!!

Agboriotejoye:

No. Inflation in Nigeria presently is monetary. CBN head been printing money like there's no tomorrow

Ok.

plaindealer:
Obi is really really dumb, the man is just too dull.

Where did he get this foolish idea from?

This is done when you have an economy/GDP that is growing too fast and you must slow it down to control inflation, the opposite is the case in Nigeria, our economy is not growing too fast and we don't have too much money in circulation to mop up.

When you do a Contractionary monetary policy, you increase interest rates which increase the cost of borrowing for companies and consumers which will definitely kill off our economy because you can not borrow money to run your business and when you do, the interest is so high that you won't be able to pay.

You sell off government bonds and securities which won't be in our favor.

This fool is prescribing headache medicine for stomach pain.

What we need is an expansionary policy, the opposite of what this ignorant village clown is talking about.

They need to beg this fool to stop talking because this is really embarrassing.

This is exactly my point. How i wish the Mods will take this to the front page so that others can contribute.

kahal29:



I focused on that because his policy prescription to the Problem of Inflation in Nigeria would conflict with those other things he is saying. It is simple economics. In the first place what is contractionary monetary policy? This simply means increasing interest rate to reduce inflation which in turn reduces Investment and production of goods and services, kills businesses especially SME, creates unemployment, stifle economic growth and finally worsens the incidence of poverty.

However, Peter Obi talks so much about moving the economy from Consumption to Production and that can only happen by reducing interest rate which in turn increases investment and production, creates new businesses, jobs and employment which drives away poverty.

All the points you are raising are simply highlighting the fact that you have to look at his economic policies holistically. And you are obviously still prescribing the Tinubu economic blueprint which has destroyed the Nigerian economy. You cannot keep doing the same thing and be expecting different results.

Peter Obi is an employer of labour and I am 100% certain he is consulting with eggheads in economic strategies, before going public with his pronouncements.
When we have greats like Pat Utomi, Muoghalu and possibly Soludo and Iweala, looking at his economic strategies, and being alright with it, that's good enough for me.

Let me give you a practical example of what your criticism is like.
Let's imagine that someone is seriously injured and is brought to a hospital. The following course of action could be prescribed for him
1. Assign him a doctor
2. Clean his wound/injury
3. Use antiseptics to keep microbes at bay
4. To make it heal fast and prevent aggrevation of the injury, we cover it up with a plaster and bandage it.

You then come around and tell us that to make it heal fast, we need to do other things instead of covering it with a plaster and bandaging it.
But the real point is that all the points from 1 to 4 are necessary for the injury to heal fast. You have to consider everything as a whole. Don't just pick a point, and start giving us the downside to that point without first considering every point made, because they may have taken care of the concerns you have about point 4.