Nigeria: The CBN Act and the Oppressive Failure of Monetary Strategy

8 December 2014

The public's usual refrain to rising prices is that "manufacturers/suppliers/farmers have increased prices of their respective goods and services; the supplier is evidently the villain in public consciousness; it would indeed require the patience of Job to convince most Nigerians that such condemnation was misplaced and it may even be more difficult to put the blame for high cost of funds at the doorstep of Central Bank. Consequently, it would be unbelievable to even suggest that CBN is infact the 'devil in our economic workshop'.

Evidently, money is the binding glue that also predicates all economic activity; it is also true that without the instrument of money as a means of exchange and a store of value, modern economies would fail. It would be chaotic if everyone could simply create or introduce their own acceptable versions of money as this would ultimately lead to millions of different 'brands' of money, with indeterminate purchasing power; apart from the ensuing market confusion, the unregulated and compulsive creation of individual money 'brands' would set so much purchasing power to chase few goods and services; inevitably, the prices of goods and services will spiral.

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