The monetary policy committee provided policy parameters at the first meeting for the 2019 fiscal year, held on 21st and 22nd January, 20191. As presumed, all parameters were left unchanged at their current levels: MPR at 14 percent, CRR at 22.5 percent, liquidity ratio at 30 percent, and asymmetric corridor of +200/-500 basis points around the MPR. This is the 14th consecutive time the MPC will retain all parameters, and the apex bank is justifying its stance by insisting that the economy has remained on a noteworthy track based on prevailing positive macroeconomic performances2. The committee’s optimistic outlook is likely hinged on, among other laudable achievements, the acclaimed return of foreign investors’ confidence and convergence of the foreign exchange market – the CBN has relentlessly upheld the value of the Naira despite perceptions of election risks on exchange rates. In the coming months, changes in monetary policy parameters will, however, depend on the macroeconomic performance after the elections as well as the objective to hit the CBN’s inflation target of 6 to 9 percent.
Macroeconomic Report & Economic Updates
The paper explores the policy framework for implementing the FRA across the 36 states, and identifies the underlying macroeconomic principles required for the FRA to be effective at the state level.
Recent NBS data shows a significant decline in power generated in 2016Q2. Precisely, power generated declined by 31 percent (quarter on quarter) from a total quarterly average of 92,352 MWH in 2016Q1 to 63,692.39 MWH in 2016Q2. Remarkably, the reoccurrences of pipeline vandalism in 2016Q2 prompted the shortage of gas for power generation. Thus, there were about eight recorded system collapses in the quarter which led to several days of power outages. However, subsequent quarterly declines in power generation could be averted if efforts to repair vandalized pipelines and adopt hydro sources are intensified.
Capital Importation: Given the positive outlook on the ITC sector in the past few years, investments in the sector reached a 10-year peak in 2014. However, the foreign investment fell marginally in 2
The global economy grew by 2.7 percent in the fourth quarter of 2016 (2016Q4) relative to 2.5 percent in 2016Q3, due to rising investment and consumption demands in developed and emerging economies as well as a rise in commodity prices. However, over the entire year, global GDP growth stood at 2.6 percent in 2016, relative to the growth of 3.09 percent recorded in 2015. Notably, output grew progressively in the US over the year, while the steady growth recorded in the UK since the start of the year stalled in 2016Q4. Also, the declining growth recorded in France since 2015 took a positive turn in 2016Q4, the rest of the Eurozone witnessed a fall in output in the quarter. While emerging economies recorded mixed experiences, many Sub-Saharan African countries showed signs of recovery in the period.