The recent reported rise of inflation in Nigeria from 9.3% to 9.4% is evidence that inflation continues to trend upwards in the country’s increasingly slow-growth economy. Given recent liquidity problems in the economy due in part to the inability of state and local governments to pay their workers, this is bad news because it can further reduce consumer demand.
In the last quarter of 2015, the CBN during its 2015 last Monetary Policy Committee (MPC) meeting cut the benchmark interest rate from 13 to 11 percent and reduced the Currency Reserve Ratio (CRR) from 25% to 20%.
The latest ranking of Nigeria by the World Bank on “Ease of Doing Business” is 169 out of 189 countries. This shows that Nigeria, Africa’s largest economy, is still struggling to make life easier for investors.
Investors are watching to see how the CBN and the government handle the Stanbic IBTC issue because it will say a lot about the independence of regulatory bodies in Nigeria which has been moot since the independence of CBN became relatively uncertain under the new administration.
Nigeria is struggling to pass the 2016 budget. The budget has caused a lot of wrangling and finger pointing between law makers, the bureaucracy and the presidency. The fiscal stimulus that everyone is waiting for is no where to be found. The general view from both sides of the political spectrum has been that the budget is froth with errors.