Nigeria’s economic recession can be traced to a number of global and domestic factors. They include slump in commodity prices, general slowdown in ec… - Sarah Alade

The Organization for Economic Cooperation and Development (OECD) countries in 2008 recommended the imposition of some form of capital controls that at least restrain inflows of short-term funds, which the CBN has done. The CBN will also do well to stick to its statutory mandate of maintaining price stability for growth. This will go a long way in moderating inflation and stimulating growth in the long run.

The inflationary pressure could be traced largely to structural factors, which included poor electricity supply, high cost of energy arising from scarcity of petroleum products, increase in the prices of imported food, raw materials and finished goods, seasonal factors, increase in electricity tariff, insurgency and insecurity in the North East, as well as pipeline vandalism by the Niger Delta militants. However, some monetary factors included exchange rate depreciation, and budget deficits in the face of dwindling oil revenues.

Key global trends such as Brexit, the rising wave of populist and anti-globalization sentiments anchored by emerging bilateralism, divergent monetary policy stance of the advanced central banks and disorderly commodity price movements will also affect monetary policy at home. These global developments coupled with domestic factors will make monetary policy management very difficult this year. Based on these, monetary policy management in Nigeria must be diligent and collaborative to achieve its objectives of price stability in the home front.