Will Nigeria’s MPC adopt aggressive rate hike?

Nigeria's Monetary Policy Committee (MPC) is gearing up to conclude its two-day deliberation and announce its decision today, amidst hints of a hawkish stance. The country is also witnessing protests organized by the Nigeria Labour Congress over the living crisis, while President Tinubu has called for the full implementation of the Oronsanye report to streamline the government. Johnson Chukwu, CEO of Cowry Asset Management, provided valuable insights in an interview with CNBC Africa, shedding light on these critical issues. As the MPC considers a potential rate hike, Chukwu suggested that a substantial increase of at least 100 basis points is expected. Recent policies adopted by monetary authorities point towards a significant tightening, with auctions showing high rates and liquidity withdrawal measures. Chukwu emphasized the importance of the MPC's role in fighting inflation and ensuring exchange rate stability. The ongoing protests by the Nigeria Labour Congress underscore the challenges faced by many Nigerians, particularly concerning the cost of living. Demands for subsidy removal and a living wage reflect the urgent need for economic improvements. Chukwu highlighted the critical role of enhancing food and crude oil production to address food prices and boost living standards in the country. The implementation of the Oronsanye report, which has been pending for twelve years, poses challenges that require strong executive support to succeed. Chukwu emphasized the need for unwavering presidential backing to navigate potential political resistance and ensure a successful execution. Despite concerns about job losses resulting from the report's implementation, Chukwu suggested that restructuring and providing reasonable benefits could lead to better efficiency and workforce optimization. The interview with Chukwu offered valuable insights into the economic landscape of Nigeria and the key factors influencing critical decisions and reforms.