Nigeria is probably already in recession defined as 2 consecutive quarters of negative growth.
If this is the case it will have come about by the irresponsible actions of the Central Bank of Nigeria (CBN), and its Monetary Policy Committee (MPC) led by a clueless and yes sir sycophant named Godwin Emefiele.
It is unprecedented to experience 2 consecutive quarters of negative growth in a developing economy like Nigeria with such a huge output gap.
In other words the potential growth an economy with so many low hanging fruits like Nigeria can attain is in the double digits( 10% plus), meaning the damage done by Emefiele is mind boggling.
The major culprit for this is the disastrous FX policy endorsed by Emefiele.
We have wondered out loud here on Nairametrics about what Emefiele is trying to achieve by destroying Nigeria’s economy and rendering millions of our countrymen jobless, just because he wants to keep his own job.
Now unemployment has soared, manufacturing output slumped by negative 7 percent and the country’s economy is smaller than it was this time last year even as the population keeps growing.
Emefiele and his MPC jokers have consistently chosen the wrong choice of policy actions since the swearing-in of President Muhammadu Buhari.
They have cut rates when they should have raised rates and begun to tighten when the major culprit for higher inflation was clear to everybody as being the FX policies they chose.
Emefiele began to sing a new song on FX policies once President Buhari was sworn in.
The man who devalued the naira in November 2014, and February 2015 (under President Goodluck Jonathan), now began to claim that the naira was “appropriately priced at N199” under Buhari.
Today as oil prices rise the naira is still under pressure (when other oil/commodity producers currencies like the rand and ringgit) are appreciating), because Emefiele and his MPC gang of yes-sir useful idiots have lost credibility in the eyes of the markets.
As the CBN begins its 2 day MPC meeting today, it is time for the institution to redeem itself and for once act in the interest of Nigerians.
The MPC must outline a new foreign exchange policy for the country that is clear, unambiguous, uses the markets to determine rates, removes arbitrage opportunities and stops corruption in the allocation of FX to friends and cronies.
Countries such as Kenya, Ghana, South Africa and Malaysia to name a few operate FX regimes which resemble those outlined above, and none of them will experience negative growth this year.
The MPC of the CBN must admit that it has failed Nigeria and begin to honorably retrace its steps.