January 2019 MPC: 5 Key Things To Watch


Monday, January 22, 2019  06.20PM / Bukola Akinyele for Proshare WebTV


The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) is holding its two-day meeting (January 21st and 22nd, 2019) to take decisions on the nation’s interest rate, money supply, and inflation rate amongst other macroeconomic indicators.

Will the rates remain unchanged or are we going to see a cut or an increase, from 2pm on Tuesday Mr Godwin Emefiele the CBN Governor will read out CBN’s first set of policy resolutions for the year. 

As the nation awaits the MPC decision we take a look at 5 key things to watch.


Unemployment rate 

According to the Nigeria National Bureau of Statistics, the unemployment rate in Nigeria increased from 18.8 percent in Q3’17 to 23.1 percent in Q3’18. 

As of Q3 2018, the calculated unemployment rate was 23.1%, the underemployment rate was 20.1%, and the combined unemployment and underemployment rate was 43.3%, this represents a 4.3 percentage point increase in the unemployment rate, but a 1.1 percentage point decline in the underemployment rate compared to the same period of last year. 

While the Q3, 2018 results show a rise in the rate of unemployment, it also depicts a slowing down in the rate of increase in Unemployment, which is usually the first sign of improvement in reducing unemployment. 

The MPC will assess the unemployment situation with a way to advising the government on the fiscal side on how it can be addressed. It will seek to assert how its monetary policy approach to the situation.

To address the unemployment challenge in the country,  there must be an alignment of the fiscal and monetary policies in the country.

Proshare Nigeria Pvt. Ltd.

Source: National Bureau of Statistics (NBS)



The December, 2018 consumer price index (CPI) latest report released by the National Bureau of Statistics, (NBS) showed an increased by 11.44% which is 0.16% points higher than the 11.28% rate recorded in November 2018. 

The increased were recorded in all classification of Individual consumption by purpose [COICOP] divisions that yielded the Headline index. 

According to the bureau, the urban inflation rate increased to 11.73% [Year-on-Year] in December 2018 from 11.61% recorded in November of the same year. The rural inflation rate also increased to 11.18% in December 2018 from 10.99% in November 2018. 

The MPC will take the current inflation rate of 11.44% into consideration as it takes its first key decision for the year 2019.

Proshare Nigeria Pvt. Ltd.

Source: National Bureau of Statistics (NBS), Proshare Research


PMI Index 

The Manufacturing PMI in the month of December stood at 61.1 index points, indicating expansion in the manufacturing sector for the twenty-first consecutive month. The index grew at a faster rate when compared to the index in the previous month. 

Manufacturers in the country expressed renewed optimism in the month of December purchasing managers index carried out by the Central Bank of Nigeria (CBN). 

A composite PMI above 50 points indicates that the manufacturing/non-manufacturing economy is generally expanding, 50 points indicates no change and below 50 points indicates that it is generally contracting. 

 This development will be of key interest to the MPC as it reviews the impact of the CBN policies in stimulating economic activities in sectors like Manufacturing.

Proshare Nigeria Pvt. Ltd.

Source: National Bureau of Statistics (NBS)


First MPC meeting before the 2019 General elections 

This will be the first MPC meeting before the general elections, that will commence with that of the Presidential and National Assembly on February 16th, 2019. 

It will be interesting to see what will be outcome of the meeting when the CBN Governor announces the decision on the monetary policy rate, liquidity ratio, cash reserve ratio amongst others. 


Economic Growth 

Nigeria’s Q3, 2018 figure GDP expanded by 1.81% up from 1.5% in the previous quarter. This provided a temporary relief to policy makers who were concerned of a possible continuation of the slowing trend in Q2, 2018.  

The non-oil sector grew by 2.32% in Q3,2018 the highest rate in 11 quarters, and the agric sector maintained its position as the highest GDP contributor despite the decline in the sector’s growth to 1.91% from 3.07% in Q3, 2017.

The MPC will consider the economic growth which is improving but at a slow pace 1.81% below the population growth of 3%. 

In this table we take a snapshot of the interest rate of four (4) other African countries, that are peers to Nigeria


Interest Rate

South Africa










 Source: Trading Economics


Proshare Nigeria Pvt. Ltd.

Related News

1.       MPC: Considerations and Policy Options: Keeping Policy Rates at Current Levels is Still Prudent

2.      Monetary Policy Outlook For 2019 - Federal Reserve

3.      Personal Statements By MPC Members At The 121 MPC Meeting of Nov 21-22, 2018

4.      Has Monetary Policy Reached Its Tether’s End In Nigeria?

5.      CBN Communiqué No. 121 of the MPC Meeting – Nov 21-22, 2018

6.      Nigeria’s MPC Maintains Status Quo At The End of November 2018 Meeting

7.      To Hold or Increase Policy Rates – FSDH Research Leans Towards a Hold Decision

8.     Refocusing The Single Digit Pricing For DFI Debate

9.      Personal Statements By The MPC Members at The 120 MPC Meeting of Sep 24-25, 2018

10.  Interest Rate Hike in US, Hold in Nigeria: What Next? – FSDH Market Outlook

11.   Monetary Policy And Risk Management At A Time Of Low Inflation And Low Unemployment

12.  MPC: Winter Is Coming For The Nigerian Economy

13.  MPC Treads Cautiously As Economic And Political Environment Remains Cumbersome

14.  CBN Communiqué No. 120 of the MPC Meeting – Sep 24-25, 2018

Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News