Continued monetary policy tightening could stifle investment, Rewane warns

Oct. 7, 2024 - Blueprint Newspapers Limited

Managing Director/Chief Executive Officer of Financial Derivatives Company Limited (FDC), Bismarck Rewane has cautioned that continued monetary tightening by the Central Bank of Nigeria (CBN) could stifle investment, slowdown economic growth, and potentially push the economy toward a recession. Rewane, who gave this warning during his October 2024 presentation at the Lagos Business School (LBS) Breakfast Session, expressed the need for stronger coordination between Nigeria’s monetary and fiscal policies.

The FDCL CEO pointed out that while monetary tightening is necessary to control inflation, excessive reliance on it without complementary fiscal measures could lead to unintended economic consequences. These include food supply chain insecurity and the need for investment in critical infrastructure and social programs to boost productivity.

On the recently announced N70,000 minimum wage, Rewane described it as a “money illusion” in an inflationary environment...