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Macro-Economic News

CBN retains MPR at 11.5%, holds other parameters constant

In its first MPC of 2021, CBN votes to MPR at 11.5% and other parameters constant.



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The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted unanimously to retain the Monetary Policy Rate (MPR) at 11.5%

This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday 26th January 2021.

Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.

READ: Nigeria’s GDP growth to rebound between 1.7% and 2.0% in 2021 – United Capital report

Highlights of the Committee’s decision

  • MPR retained at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • While Liquidity Ratio was also kept at 30%

According to Emefiele, MPC was of the view that it should pursue its current stance of systematic synchronization of monetary and fiscal policy accommodation through its developmental finance initiatives. This is aimed at quickening the recovery process of the country’s economy.

“Although the economy is currently in a stagflation environment with simultaneous occurrence of inflationary pressures and contracting output, the MPC resolved to reverse both developments and continue pursuing price stability in growing the economy”, He said.

On the other hand, the committee also opined that an aggressive expansionary stance could worsen both inflation and the negative real interest rate, thereby affecting the exchange rate negatively.

READ: CBN issues modalities for payout of diaspora remittances in dollars

CBN’s move to quicken economic recovery

According to the report, The Central Bank has committed a substantial amount of money towards its effort to mitigate the impact of the covid-19 pandemic on the economy.

  • Notably, a total disbursement of N20 trillion has been made as at January 2020 to cushion the effect of the pandemic.
  • It also stated that from the Covid-19 Targeted Credit Facility (TCF) meant for household and small businesses, a total of N192.64 billion has been disbursed to 426,016 beneficiaries.
  • N106.96 billion have also been disbursed to 27,956 beneficiaries under the Agri-Business Small and Medium Enterprises Investment Scheme (AGSMEIS)
  • While 72.96 billion has been deployed to 73 projects in the Health Care Support Intervention Facility.
  • Other areas where the CBN had deployed funds include; the Creative Industry Financing Initiative and Nigerian Youth Investment Fund, National Mass Metering Programme.

READ: Analysts predict higher inflation rate for Nigeria in 2021

Outlook for the economy

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  • The committee reiterated that available data and forecasts for key macroeconomic variables for the Nigerian economy suggest a further improvement in output growth in Q1 2021. A development, which would be supported by the coordinated and sustained interventions of the monetary and fiscal authorities.
  • Some other interventions that would also support the intended growth include the broad-based stimulus and liquidity injections.
  • Inflationary pressure is expected to commence moderation as the economy’s negative output gap closed.
  • The committee, however, raised concerns over uncertainties in the oil market and the current uptick in the second wave of covid-19 infection rate as it could pose some downside risks to this forecast.

READ: CBN to prevent exporters with unrepatriated export proceeds from banking services


What this means

  • The Central Bank’s decision to retain the benchmark interest rate at 11.5% is in line with its move to boost consumer spending by increasing credit facilities to households, SMEs, health, agricultural, and the manufacturing sector so as stimulate the Nigerian economy.
  • Holding the rate will also encourage borrowing, as lending rate by banks is expected to remain low.

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Macro-Economic News

The moment Emefiele predicted Nigeria will be out of recession in Q4 2020

The CBN Governor had expressed optimism last year that the country was going to come out of recession in Q4 of 2020.



parallel market, Covid-19: N3.5 trillion disbursed as stimulus package for the Nigerian economy, CBN Vs NESG: Waving the white flag for the benefit of Nigerians, Exchange Rate Unification: CBN devalues official rate to N380/$1, Nigerian banks have written off N1.9 trillion impaired loans in past 4 years, CBN sandbox operations, Stirling Trust Company Limited, Key highlights of the October 2020 Business Expectations Survey Report, A Total of N3.5 trillion was disbursed in the wake of the COVID-19 pandemic, in addition to several other interventions to reflate the economy - CBN, BOFIA 2020: Steps forward or backwards for Nigerian banks, Total credit to the economy rose to N19.54trillion – CBN Governor

It is no longer news that Nigeria, Africa’s largest economy, against all expectations exited recession as its Gross Domestic Product (GDP) grew by 0.11% in the last quarter of 2020 (year on year).

However, the Governor of the Central Bank of Nigeria, Godwin Emefiele, had expressed optimism last year that the country was going to come out of recession in the fourth quarter of 2020.

According to the report released by the National Bureau of Statistics (NBS), this is the first positive quarterly growth in the last 3 quarters following growth in telecommunications and agriculture which seem to make up for the sharp drop in oil prices and production.

The surprising rebound of the Nigerian economy is coming against the prediction of the country’s Minister for Finance, Budget and National Planning, Zainab Ahmed, who while speaking at the 26th Nigerian Economic Summit, said that Nigeria is expected to exit recession by the first quarter of 2021.

The CBN Governor had during the November 2020 Monetary Policy Committee meeting, predicted that the country was going to come out of recession by the fourth quarter of 2020.

This as he said that many analysts expressed doubts about that and were waiting to prove him wrong.

In a video during a press conference as seen by Nairametrics, Emefiele said, “You said that in November MPC, I was cautiously optimistic that fourth-quarter GDP will be positive thereby taking Nigeria out of a recession that I was aggressively optimistic that during the first quarter, we will exit recession. I am praying very seriously that my prayer should be heard because I know that people are waiting to put my neck on the chopping board to say that I do not know my work.’’

What you should know

  • Despite Nigeria’s surprise exit from recession, experts have still expressed their reservations about the country’s weak economy which is faced with several challenges for businesses ranging from foreign exchange pressure, high unemployment level, increasing consumer prices, serious security challenges, weak investor confidence, etc.
  • This is as the growth in GDP was primarily driven by the Information and Communication sector and the Agricultural sector.
  • However, the surprise rebound of the economy means that Nigeria may recover faster than expected as crude oil prices and production increase this year.
  • This also shows that the country needs to redouble its efforts in the growth of the non-oil sector which contributed 94.13% to Nigeria’s GDP.

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Macro-Economic News

Aviation’s real GDP contracts by 36.98% in 2020

Real GDP contracted by 36.96% in 2020 compared to the 13.17% recorded in 2019.



The real Gross Domestic Product of the aviation sector contracted by 36.96% in 2020 compared to the 13.17% recorded in 2019.

This was disclosed by the National Bureau of Statistics in its Q4 2020 GDP and full-year 2020 report on Thursday.

It tweeted, “Air Transport under Transportation & Storage real GDP contracted -51.69% compared to -38.86% in Q3 2020 & -14.98% in Q4 2019. 2020 Air transport real GDP contracted -36.98% compared to 13.17% in 2019.”

READ: Nigeria’s oil sector contracts by 13.89%, as covid-19 plunges economy into recession

READ: Nigeria’s GDP contracts by 1.92% in 2020, as economy initiates recovery

What you should know

Nairametrics reported last year that contribution of the Aviation industry to Nigeria’s economy (in nominal value) increased by 0.14% in 2019, as it rose to N198.62 billion. This was disclosed by the National Bureau of Statistics (NBS). But there are concerns that the feat would not be repeated or surpassed in 2020, as the industry is expected to suffer a decline.

READ: GDP: Agriculture sector grows by 3.42% in Q4 2020

Prior to 2019, the Aviation Industry contributed N149.35 billion to the country’s gross domestic product in 2018, representing 0.12%, but in 2019, the figure increased due to political activities in Nigeria. Nigeria held its elections last


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