Better to be safe than sorry Decision Liquidity Ratio Asymmetric - PowerPoint PPT Presentation

CBN BN Say ays s – As s You Were “Better to be safe than sorry”

Decision Liquidity Ratio Asymmetric MPR CRR Corridor 14% 14% p.a p.a 22.5% p.a 30% 30% + 200/ 200/-50 500 bps 2

Clear & Present Danger Fiscal Consolidation Infla lation tion up again n August – 11.23% Unemp employmen loyment Subsid sidy N2.4bn daily 20%* Monetary M2 Growth rowth Minimum nimum wage Elect ection ion Slowing wing GDP GDP 2.98% N18,000 - ?? spend nding ing 1.7% (2018)

External Factors – Mixed Bag Positive Trends Negative Trends Investment flows - Oil price & revenue up US interest rates – $5bn ($82pb) 0.25% p.a Naira-Dollar Depleting External Stock market wobbling Weak but stable Reserves – down $4bn – down 13.41% IEFX - N364/$

SSA- Macroeconomic Scorecard Country GDP Growth Rate Inflation Monetary Policy (Q1’18) (August’18) Rate (Aug/Sept) 1.5%(Q2’18) 11.23% 14% Nigeria 6.8% 9.9% 17% Ghana 1.9% 4.04% 9.0% (June) Kenya -2.2% 18.56% 16.5% Angola -0.7% (recession) 4.9% 6.5% South Africa South Africa in recession – (0.7%) Angola adjusted its currency Inflation across SSA declining – continent’s average declined from 11% to 9.7% Election in Cameroon in October

Economic Impact Lending rates M2 Growth 26%p.a 2.98% Debt service GDP Growth Credit Squeeze 50% of Revenue 1.7% (2018) 0.81% 6

To the Nigerian WORKER MIDDLE CLASS ELITE/ AFFLUENT Struggling & Crying Down & Out No shaking School Fees Summer Ticket Domestic Food Flat Higher Higher Prices Stay High Intl School Fees Marginally Higher Unemployment House rent Flat lining Increase House rent House rent Increase Increase Medical Increase Medical Increase Medical

State-by-State Inflation: Kwara the Best States with the lowest States with the highest inflation (%) inflation (%) Kwara – 8.25% Yobe – 12.9% Borno – 9.88% Lagos – 12.64% Benue – 10.11% Enugu – 12.52%

Commodity Prices – Mainly Higher 5 reds, 2 greens Minimum Wage Purchasing power + = Price Elastic Commodities % Change Direction Current Prices Sep’16 Palm Oil (5L) N2,000 N2,600 23.08 Yam (3 tuber) N1,900 2,100 9.52 Tomatoes (50kg) N12,000 10,000 20 18,000 27.78 Price Inelastic Garri (50kg) (Yellow) N13,000 N18,000 Rice (50kg) 19,000 15.79 Flour (50kg) N11,200 11,000 1.82 Beans (Oloyin) (50kg) N26,000 19,500 58.82

Outlook MTN saga will be amicably resolved Minimum wage will increase to approximately N45,000 Inflation will increase again – 13% (Year end) External Reserves - $43bn Increased unemployment + underemployment (41%) Agric output down in Middle-Belt GDP - 1.7% (2018)