Lingering

The Central Bank of Nigeria (CBN) has postponed the meeting of its Monetary Policy Committee (MPC) for a second time since Governor Olayemi…

The Central Bank of Nigeria (CBN) has postponed the meeting of its Monetary Policy Committee (MPC) for a second time since Governor Olayemi Cardoso was nominated to the post in September, leaving investors guessing. The delay comes as the foreign exchange backlog worth several billions of dollars has not been fully cleared with only 75 to 80 percent being cleared. The MPC, which usually meets bimonthly, has not met since July when it raised the Monetary Policy Rate to 18.75 percent. It was expected to hold its last meeting for the year this week, November 20 and 21.

Supporters of the current administration present Olayemi Cardoso’s recent rate hikes since October as evidence of a clear policy direction. However, it is crucial to recognise that this is precisely the function of the MPC, and bypassing the MPC to make these decisions eliminates a safeguard that even the Buhari administration, despite its attempts to weaken the CBN’s independence, did not eliminate. The MPC is a core institution in managing the country’s monetary policy. Market watchers and investors have been keenly waiting for the MPC meeting since Mr Cardoso was appointed as the CBN governor to understand the monetary policy direction of the Cardoso regime. Inflation remains at high double digits, hitting 27.33 percent in October 2023, while the naira has depreciated to $1/₦1,150 in the parallel market. Given that President Tinubu has been busy courting foreign investors, it hardly paints the picture of a serious economy that two MPC meetings have been postponed. Simply put, the markets have still not met the new CBN leadership. The previous MPC meeting postponement was excused as the new CBN leadership had just resumed office, and it was understood that they would need time to settle down. Interestingly, the CBN has announced via its official social media handles that the governor will “unveil the Bank’s Monetary Policy Thrust and Economic Outlook for 2024” at the Chartered Institute of Bankers of Nigeria annual dinner that will be held tonight (24 November). Choosing a dinner to unveil his policy thrust while ignoring two official meetings doesn’t make Mr Cardoso look good. We hope that the CBN Governor will make clear pronouncements to restore market confidence in these turbulent times. It is unlikely the MPC will meet again in 2023. However, it must be one of the first orders of business in 2024.