Friday, April 21, 2017/ 6:50 PM /Proshare Research
The persisting monetary disturbance coupled with a high misery index underline the current negative trough effect that has taken hold of the macro economy.
More importantly for a country which has a long history of heading towards symptoms rather than cure. It has become imperative to lend a voice to the debate more than ever before.
This study chose Panama - a country which has a completely different monetary dynamic compared to Nigeria and why? First, it had to delve into flaming Mundel’s model of holy trinity to point out that both countries signed up for capital mobility.
The study also showed that while a favourable oil price attracts strong influx of capital mobility, proper macro discipline void of basic economic flaws is needed to sustain such attraction. Therefore, there is a need to create attraction by resolving basic economic flaws in the real economy.
It went further to identify that favourable price effect could circumvent macro discipline for some time but not all the time. The cost of earlier circumvention adds to the vagary, when favourable price effect has been subdued. Attempts to resist such needed macro discipline only blister the momentum of the vagary.
Therefore to regain the right positive momentum for an escape velocity that will stir productivity. Nigeria is in need of deep macro adjustment both at the fiscal and monetary end at this point of the cycle. The ability to stick to macro management alone will just be a symptomatic response not a real cure to the existing vagary.
Lastly, the report made it clear that a dynamic adjustment path cannot be achieved with the presence of an opaque foreign exchange structure. In order to achieve a dynamic adjustment path, a foreign exchange structure which is anchored by real effective exchange rate is inevitable.
Download the March 2017 – Proshare Confidential report here.
Previous Proshare Confidential Report(s)
1. FX Utilisation in January 2017-Symptoms of An Opaque Structure
1. Downside Risks to the Fund's Outlook; 2017 Global Growth Forecast Up to 3.5%
2. April 2017 World Economic Outlook - Transcript of Press Briefing
3. The Financial Stability Board (FSB) Completes Peer Review Of Brazil
4. Nigerian Economy Signals Recovery - FSDH
5. Nigeria: Unwinding the IMF Put Options - Oshikoya
6. Nigeria’s Economic Outlook In 2017 - Teriba
7. Naira Gains as the CBN Tries to Catch a Falling Knife - LBS EBS - April 2017
8. FGN deficit 50% higher in 2016; Widened from N1.50trn to N2.35trn
9. Nigerian Economy Shows Positive Outlook - FSDH
10. Inflation Expected To Slide Further To 16.4% In March 2017 - FDC
11. It is About Time to Resolve Nigeria's Monetary Policy Conundrums
12. Current Account Back Into Surplus
13. The EGRP Articulates Up To 60 Interventions and Initiatives That Must be Executed and Completed
14. The Hard Facts To Rescue The Nigerian Economy
15. Official Reserves Rise Above US$30bn in March 2017 for the First Time Since November 2015
16. Economic Associates’ Q1 2017 Review and Outlook for the Year
17. Nigeria ranks 161 in Global 2017 Index of Economic Freedom: Trade and Prosperity at Risk
18. IMF Executive Board Concludes 2017 Article IV Consultation with Nigeria
19. Opeyemi Agbaje calls for Lower Interest Rate as Economic Positives Become Stable
20. FAAC Disburses N514.15bn in February 2017
21. FG releases Economic Recovery Plan for Nigeria
22. An Economic Tale of Two Countries – Some Lessons for Nigeria
23. Ahead of MPC Meeting Today, CBN and Fiscal Authorities Met in Abuja Over The Weekend
24. A Blip or a Trend? - Inflation dropping to 17.78%, first time in 15 months - Rewane
25. NASS Support Critical To The Success Of The Economic Growth & Recovery Plan
26. Pathways to Self-Transformational Development - EhieduIweriebor
27. A Cursory Look at Nigeria's Economic Recovery and Growth Plan
28. Building A Competitive Economy For The Future
29. IMF: Time for a Policy Reset in Nigeria/SSA