In curbing inflation, CBN's traditional approach of reducing the demand power of citizens via withdrawing the excess money in circulation in the instance where demands for goods and services
increases above its supply, have proven to be dysfunctional in the long run and thus responsible
for our enclaved cum (up and down) economy!
increases above its supply, have proven to be dysfunctional in the long run and thus responsible
for our enclaved cum (up and down) economy!
Have you ever imagined the extent of development we will achieve if our government and central bank could change their traditional approach to curbing inflation and start targeting to raizing the production and supply (of good and service) far above the current domestic demand?
The implications of excess supply will be:
1. Producing above domestic demands, thereby encouraging exportation as external markets would be sought (this is wath happened during the 19th century industrial revolution in Europe)
2. Excess supply would bring down the cost and standard of living as firms would both reduce price
and increase quality to outcompete competitors...we will start having quality products at cheaper rate!
and increase quality to outcompete competitors...we will start having quality products at cheaper rate!
3. With good standard of living, we will attract both diaspora Nigerians and other nationals to become domicile in our country, which leads to population increase and also more increase in demand...this increase in demand will now balance the excess supply, leading to economic growth, and if government can still increase supply above the new demand, the trend will culminate into economic development if meticulously and pragmatically maintained...!
BY VICTOR E NWOBIKE
the post-modernist political scientist
Good piece but i think d private sector has more to do in d issue of producing goods that can check inflation... OI
ReplyDeleteI totally disagree with this theory and i rightly demand for the qualification of this author. Our challenge is now more than this trial and error proposition. We need a practice that will transform our economy for good. God bless Nigeria
ReplyDeleteHaba @ least he brainstormed n came up with dis..., instead of unwantom criticism lets try it..., it may work since our leaders av run out of ideas we need ideas 4rm all n sundry 'cos ME i'm tired of dis 'cashless n cashcraft' economy 'cos its leading 2 Hyper-inflation!!! C.T
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