Nigeria: Economy Challenged By Stagflation - CBN

Photo credit: CBN

Despite the improved gross domestic product, GDP, report released by the National Bureau of Statistics, NBS, for the first quarter 2021, Q1'21, the governor, Central Bank of Nigeria, CBN, Godwin Emefiele, has said Nigeria's economy is in stagflation, describing the GDP growth numbers as weak.

In economics, stagflation or recession-inflation is a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high. It presents a dilemma for economic policy, since actions intended to lower inflation may stagnate growth while exacerbating unemployment.

It was against this backdrop that the CBN's Monetary Policy Committee, MPC, yesterday decided to retain the Monetary Policy Rate (MPR) at 11.5 per cent, along with all other parameters with the Asymmetric Corridor at +100/-700 basis points around the MPR; Cash Reserve Ratio (CRR) at 27.5 percent; and the Liquidity Ratio at 30 percent.

Taking this position at the end of the MPC meeting in Abuja yesterday, Emefiele, however, said his team was determined to make a significant change through the various interventions of the apex bank.

By Emma Ujah.

Full story at Vanguard.