Economy
Udemezue Gives CBN Tricks to Tackle Nigeria’s High Inflation
By Ahmed Rahma
The Chief Executive Officer (CEO) of Flame Academy & Consulting Limited, Mr Orji Chigozie Udemezue, has advised the Central Bank of Nigeria (CBN) to apply contractionary measures to curb inflation in the country.
According to the National Bureau of Statistics (NBS), inflation in Nigeria rose in December 2020 by 15.75 per cent and for Mr Udemezue, this is very high.
To control this, the economist has told the central bank to reduce government spending by stabilising price, which according to him, is the main duty of central banks across the globe.
Mr Udemezue, while speaking on Channels Business Morning, added that when CBN raises rate, there will be so much rush for money market instruments as banks would not be able to carry out their primary function of lending money to customers because people will not be able to borrow at a higher rate, allowing the apex bank to mop up the excess liquidity in circulation, which will slow down inflation pressure.
“Prices are still going up. Theoretically, we see that inflation today is about 15.75 per cent but actually in the market, most prices have gone more than 50 per cent on the things we buy.
“[The] duty of the central bank is to maintain price stability, that’s everywhere in the world and to do that, looking at the way things are now, we expect that the central bank should be trying to curb inflation by doing what they call monetary policy contraction, trying to apply contractionary measures i.e trying to raise rate. When they raise the rate for example, what will happen is that there is so much rush for money market instruments, banks will not be able to lend out more money and people will not be able to borrow at a higher rate and, therefore, you mopped up the money in circulation and then slow down inflation pressure,” he said.
Commenting on the fact that MPC was confronted with a policy dilemma at the last meeting, he said, “well, it is just the option of sit down dey look, let’s just watch as things go, because the whole essence of monetary policy obviously is to manage the quantity of money in supply in the economy.
“The argument theoretically is that when there is so much money in circulation, there is a lot of money pursuing a few goods, therefore, driving prices up.
“So, the primary duty of central banks all over the world is to maintain monetary stability, ensuring that price increase in the economy does not go at hyper rate i.e. saying inflation like in Nigeria having double-digit and beyond, that’s what damages productivity.
“So, you find that the Central Bank of Nigeria is in a very big dilemma. Ordinarily, if you look at their objective of maintaining price stability, we are losing it.”
Expressing his belief on the measures, he said, “You know, that’s what we should be looking at right now. If they do that, trust me, it is going to be very counterproductive because already, the economy is in deep trouble with COVID-19 and all of that.
“So, at this point, no reasonable central bank will be looking at an increase in rate instead everywhere in the world, we are looking at monetary easing or what they call expansionary monetary policy, whereby rates are brought down to enable the real sense of economy to enable to borrow at a reasonable rate, drive production and be able to reverse as it is now and economy in recession.”
According to him while answering the question of what is driving inflation in Nigeria, the pressure on foreign exchange (FX) is the major cause and the fact that the country depends too much on foreign goods.
“[The] Nigerian economy is a very peculiar economy, many times it tends to work out most established economic theories and even practices.
“Elsewhere in the world, there are no major issues about inflation because domestic demand is at its lowest level, travels are restricted, the COVID-19 lockdown has left people with no jobs.
“Theoretically, people don’t have money to spend.
“Most economy especially western economies, you find that aggregate demand is actually on a decline and, therefore, purchases are not going up as it should be. So, inflation is actually low in those places unlike in Nigeria, the argument is different.
“The factors driving inflation in Nigeria is not demand-pull, it is not about you and I having so much money in our pocket, having greater command for commodities.
“So, what happens here is inflation flows really from FX pressure. We are not self-sustaining and we import practically everything we use. So, the pressure on our FX, input costs is huge.
“Our local manufacturers have to import there input materials which are now at the all-time rate and then the finished goods we also import that we use in domestic things like the furniture and office equipment are also coming at a much higher rate because of the devaluation and depreciation of our currency.
“What is causing this depreciation? Until we address the issue of continuous depreciation of our currency, inflation can never be dealt with.
‘That is why even at the time when all of us are not demanding much when domestic demand is so low, we still see inflation climbing up the roof particularly food inflation and similar factors.
By Aduragbemi Omiyale
The planned listing of the Dangote Petroleum Refinery & Petrochemicals on the Nigerian Exchange (NGX) Limited is already attracting interest from South African investors and others.
The leadership of South Africa’s Government Employees Pension Fund (GEPF), alongside the Public Investment Corporation and Alterra Capital Partners, were recently at the Lagos-based facility.
The chairperson of GEPF, Mr Frans Baleni, said that the refinery stands as evidence that Africa can execute transformational infrastructure projects when backed by visionary leadership, long-term investment and strong technical expertise.
According to him, the significance of the project extends well beyond Nigeria’s borders, noting that it should reshape how Africa thinks about itself.
“The Dangote Refinery and Petrochemicals Complex is a powerful demonstration that, with visionary leadership and long-term capital, that perception no longer holds. This is the kind of African-led industrial scale that institutional investors on this continent should be backing,” he said.
Also speaking, the chief executive of PIC, Mr Patrick Dlamini, described the refinery as one of the most transformative industrial projects undertaken on the continent, saying it is reshaping global perceptions about Africa’s industrial capabilities and economic potential.
He said PIC, which manages about $230 billion in assets largely on behalf of South Africa’s Government Employees Pension Fund, is actively seeking long-term partnerships aligned with infrastructure development, industrialisation and economic transformation across Africa.
“There is real strategic alignment between Dangote’s industrial agenda and how we are positioning our portfolio, and we look forward to exploring meaningful avenues for collaboration,” he stated.
While receiving his visitors, the chief executive of Dangote Group, Mr Aliko Dangote, said the proposed listing is designed to democratise wealth creation and give Africans direct access to participate in the continent’s industrial transformation.
“We are opening the doors for investors to participate directly in Africa’s industrial future and the prosperity it will create,” Mr Dangote said, adding that the refinery project reflects the scale of untapped opportunities within Africa’s energy market, particularly as most countries on the continent remain dependent on imported refined petroleum products despite growing industrial demand and rising consumption.
The billionaire industrialist noted that demand for products such as polypropylene, aviation fuel and refined petroleum products has exceeded earlier projections, reinforcing the commercial viability of the refinery and shaping future expansion plans.
By Adedapo Adesanya
Nigeria’s oil exploration and drilling activities declined by 41.7 per cent in April 2026, following reduced upstream operations and investment activities.
According to the May 2026 Monthly Oil Market Report (MOMR) of the Organisation of the Petroleum Exporting Countries (OPEC), Nigeria’s rig count, a major indicator of upstream oil and gas activities, dropped to 12 in April 2026 from 17 recorded in March 2026.
The decline came amid persistent upstream investment and operational challenges, according to the latest monthly report released by OPEC.
Earlier data contained in the May 2026 edition of the MOMR also showed that Nigeria’s average rig count declined to 13 in 2025 from 15 recorded in 2024, indicating reduced exploration and drilling activities in the upstream petroleum sector.
The report showed that Nigeria’s rig count fell by five rigs month-on-month, from 17 rigs in March 2026 to 12 rigs in April 2026.
Rig count is widely regarded in the petroleum industry as a key indicator of exploration, field development and investment activities.
The decline comes despite ongoing efforts by the Nigerian government and industry operators to raise crude oil production, boost reserves and attract fresh upstream investments under the Petroleum Industry Act (PIA)
Nigeria’s performance contrasted with the broader African trend, where total rig count increased marginally from 42 in March 2026 to 48 in April 2026.
However, Nigeria accounted for a significant share of the continent’s decline in operational rigs during the period.
Within OPEC, Nigeria remained behind major producers such as Saudi Arabia, which recorded 265 rigs in April 2026, the United Arab Emirates with 66 rigs, and Iraq with 19 rigs.
The development also comes at a time when Nigeria is struggling to meet its crude oil production quota allocated by OPEC consistently.
By Adedapo Adesanya
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the headline interest rate, the Monetary Policy Rate (MPR), at 26.50 per cent.
This was disclosed by the Governor of Nigeria’s central bank, Mr Yemi Cardoso, on Wednesday, after the conclusion of the MPC meeting. He noted that the decision was hinged on Nigeria being largely insulated from external shocks relating to developments in the Middle East.
He also acknowledged that inflation and exchange rate stability were put into consideration during the two-day meeting.
The committee reduced the benchmark interest rate by 50 basis points from 27.0 per cent to 26.5 per cent at its 304th MPC gathering in February.
Nigeria’s inflation rose to 15.69 per cent in April 2026, affected by the fallout from the Iran war, which continued to impact the global economy. Noting that year-on-year, the figures show a moderation rather than worry.
The headline inflation rate for April on a month-on-month basis was 2.13 per cent, while the food inflation rate in the review month was 16.06 per cent on a year-on-year basis.
Mr Cardoso noted that the Cash Reserve Ratio (CRR) was also retained at 45 per cent for commercial Banks, 16 per cent for Merchant Banks, and 75 per cent for non-TSA public sector deposits.
He added that the Standing Facilities Corridor was also held flat at +50 / -450 basis points around the MPR.
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