₦airaland Forum

SoNature:
If they don't rescue that ram asap, it will die of cold. I wonder how they could be that careless to allow the ram fall into that deep well.

grandstar:
The use of interest rates to keep inflation low has been used for decades in Nigeria and it
worked.

The present negative interest rates is rather new and a departure from the norm and might have begun during Emefiele's term in office.

I gave you an oversimplified view on how it works

The banks and other large institutional investors are those that mop up these bonds. Banks prefer to lend to government or the CBN as there's a guarantee there won't be a default.

The speed at which you termed it a fantasy is worrisome and typically Nigerian. It's judgmental. Nigerians are quick to denounce and discredit many "foreign" economic policies as unworkable here in Nigeria, especially anything stemming from the IMF and the World.

Yet, under a former World Bank executive, Okonjo-Iweala, the country's foreign debt went from $35bn to $5bn, and she left $20bn in the Excessive Crude Account.

The new Senegalese government has unveiled measures to reduce the price of rice, oil, bread, and other basic items to address cost-of-living concerns amid high unemployment and inflation.


The country's budget Minister Cheikh Diba confirmed the development.


Recall that President Bassirou Diomaye Faye, who won the March election, vowed during the campaign to address high living costs in the West African nation that heavily relies on imports.


Under the new measures, the price of a kilo (2.2 pounds) of the most widely consumed type of rice will be reduced by 40 CFA ($0.065, 0.061 euros), while a baguette will cost 15 CFA (0.023 euros) less, the government announced at a media conference, Agence France-Presse reports.


The reductions, which also cover cement and fertiliser, will take effect in the next few days, government Secretary General Ahmadou Al Aminou Lo told reporters.


Spending on food accounts for half a Senegalese household’s budget, Lo said, adding checks would be stepped up to ensure traders respect the new prices.


Budget Minister Cheikh Diba said the government would forego taxes and customs duties imposed on importers to subsidise the price cuts.


The measures will cost 53.3 billion CFA (more than 81 million euros, $87 million), Diba said.


This comes after Senegal joined the club of oil-producing countries this week as Australian group Woodside Energy announced that production had started in the country’s first offshore project.


Faye vowed that profits from the country’s gas and oil resources would be “well managed.”

“To allow higher inflation to become entrenched in people’s expectations would make it much more expensive to reduce later through even higher interest rates, larger output losses and higher unemployment,” he said.

grandstar:
The CBN never tried hard enough to contain inflation using interest rate hikes.

For them to really prove effective, interest rates must be higher than inflation and over the past 12 months, this has never occurred.

Interest rates rates presently sit at 28.75% if I am correct while inflation is above 30%. Interest rates aren't positive. The economy needs interest rates that are positive in real terms to bring inflation down.

If interest rates are above inflation or positive in real terms, this will encourage savings rather than spending, taking money out of the system which therefore reduces inflation.

Repo7, this is how it works. Imagine you want to buy a phone

Imagine inflation is 35% and savings interest rates are 30%

If I saved 100,000, the bank would pay me 130K at the end of the year while the price of the phone would be 135k.

Let's have another scenario and say inflation is 35% and savings interest rates are 40%

By the end of the year, the bank would pay me 140k while the price of the phone would be 135k. I can not only buy the phone, but have an extra 5k. This is an overly simplistic example.

The higher the interest rate, this will increase the amount of money saved, removing more money from the system which would have been spent and spiked inflation. I hope you get the picture.

Blazetrailer:
Please ignore the buffon. He is a waste of time. He knows nothing.

omohayek:
If you had reading comprehension skills beyond those of a primary school student, you'd have realized that the solution you seek has already been offered by the World Bank - the CBN needs to raise interest rates a lot higher, and a lot more aggressively than it has done.

Even with all the hikes to date, real interest rates are still negative, which is utterly ridiculous, since it means anyone wanting to preserve the purchasing power of their savings must either seek out inflation-proof assets like gold or property, or else dump the Naira for more stable foreign currencies in the hope of riding out the inflationary wave. In short, the World Bank is only spelling out the obvious, as much as that may fly over the heads of ignoramuses like you.

However, the World Bank warns that this may not be enough to address the issue.

iwaeda:
Nlfpmod after deceiving World Bank is now stating the obvious.

nasek:
Why not proffer solutions instead of criticism if they truly Cares, Instead of acting like an opposition party

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SoNature:
Reasons why foodstuff prices are increasing:

1. Insecurity in the north - farmers cannot access their farmlands anymore

2. Increase in transportation prices - thanks to petrol subsidy removal

3. A lot of middlemen (like policemen and agbero) extorting drivers and sellers

4. Increase in prices of farm inputs - inflation

5. Little or no government intervention in forms of seedlings, tractors, fertilizers, etc.

6. Price manipulation by sellers to make more profits.

LordIsaac:
The blood of Jesus was shed for the final atonement for our sins. No need to suffer looking for ram to slaughter. Just accept Jesus and be saved!😁

“You can count on your fingers the number of large-scale mechanised farmers we have in the country as it is in the developed climes.