Tekedia Capital is excited to welcome US-based Remy Security into our community. The startup uses artificial intelligence (AI) to help security teams conduct design reviews quickly and effectively, reducing the cost and effort of proactively securing products.

By leveraging large language models (LLMs) to analyze design documents, Remy makes it easy for security teams to prioritize and review engineering designs that carry the biggest business risks, helping companies create products faster  without sacrificing security. More so, its foundational technology has applications in compliance, legal and financial reviews.

To learn more about RemySec, go here .

For more on Tekedia Capital, go here.

Great comments on my postulation on the new playbook from the Central Bank of Nigeria and my position that we must follow the new strategy with rate reduction. From all the comments, this is the core theme: If the Central Bank of Nigeria reduces interest rates to boost supply towards taming inflation, you cannot guarantee that the demand side will remain the same.

My Response: Sure, I cannot guarantee that Demand will remain the same but note that interest rate changes do not affect consumer demand that much in Nigeria since we have a limited consumer lending system. In other words, when we change rates, we are merely affecting companies as they’re really the entities which actually  borrow in Nigerian banking. (Also, my assumption is that the new CBN policy of focusing on strategic advisory over mindless injection of cash via Ways and Means will be implemented, taking out government spending along with it.)

Yes,  the irony is that only companies can actually drive production (which boosts Supply) and that is why using the increase of rates to fight inflation in Nigeria has not been effective. Contrast this with say the United States where consumer lending is massive via credit cards, etc. There when rates go up, you influence Demand significantly, making it possible to cool down inflation.

Our strategy cannot mirror the US or economies with developed consumer lending because higher rates punish those who are to boost Supply which is vital for us to reduce inflation. It is social science and I challenge the central bank to try this for 6 months, at least in Oriendu Market Ovim. 

How Do You Implement These New Rates?

To avoid abuse where people get cheap money and indulge in new SUVs and yachts, go through trade unions, making it clear that only members of say Manufacturers Association of Nigeria can get those cheap loans. Also, the lower rate funds should be used for financing equipment & machinery, and working capital, and not frivolities like first class air tickets, SUVs, and golden parachutes. The end goal here is to boost Supply which is necessary if we hope to tame inflation.

Today, our strategy through rate hikes is to reduce Supply even when we have minimal impact on consumer Demand which is a critical component of inflation especially food inflation.

I commend Nigeria’s apex bank governor, Yemi Cardoso, for this new playbook: ‘In a significant shift from previous practices, Cardoso revealed the central bank’s intention to withdraw from direct development financing interventions. He said the CBN aims to transition to more limited advisory roles that align with the government’s economic agenda. There is a need to pull the central bank back from direct development finance interventions into more limited advisory roles that support economic growth,” explained Cardoso.”

This is what I have been advocating for ages. I had noted that part of Nigeria’s problem was the overheating of the economy with Naira via the Ways and Means policy ( Nigerian government borrowing from CBN!) which distorted market equilibrium, and in the process neutralized CBN policies.

Largely, you raise interest rates to slow the economy and control inflation, but the next day, you print billions of Naira and hand it over to the government, canceling out the very policy you are architecting to control inflation. Under that regime, Nigeria has struggled to tame inflation!

But with this new policy, there is hope. Of course, everything depends on  Cardoso’s capacity to hold his ground as the government comes with a debit card for more money, knowing that the CBN can load the ATM with cash!

I call on the apex bank to also do something new: instead of raising rates to lower inflation in Nigeria, lower interest rates to boost production and supply. I guarantee you that if you lower interest rates in Nigeria, you will improve the Supply side in the market, and if that happens, inflation will drop. Our inflation is driven by low supply, and when we raise rates, we reduce supply [higher productive cost depresses supply] even though the policy has no impact on Demand since our consumer lending is largely nonexistent.

If you cannot try it across Nigeria, use Ovim, and you will see how inflation will drop in Oriendu Market, Ovim, Abia State.

Following growing public outcry over the nation’s current economic situation and mounting pressure from stakeholders to turn the fortune around, the CBN has been caught in the mix. The apex bank’s attempts for years to change the economic trajectory with varying monetary policies failed.

In a speech delivered via email on Tuesday, as reported by Reuters, Cardoso highlighted the pressing issues of a depreciating naira, double-digit inflation projected to reach 30% in the near term, and a staggering N87 trillion debt.

Comment On Feed

Comment 1: I have always held the opinion that until we go back to supply side economics, the whole monetary and fiscal policies of Nigeria will not yield 100% return. The supply side is the key. Let us have enough food supply with reliable road infrastructure that ensures prompt delivery at reduced cost anywhere in the country, consumer price index will go down which will directly impact inflation rate.
Let Govt provide infrastructure that supports surplus supply of food, clothing and shelter and see how cpi and inflation goes down.

Comment 2: Interesting positions. However, when the supply side is boosted and consumer lending remains non-existent, as the erudite Ndubuisi Ekekwe pointed out, there’s still a problem.

My Response: The problem is that prices will drop due to “Oversupply” assuming no change in Demand. That is a good problem to have in Nigeria right now and especially in Oriendu Market Ovim.

Comment 3: Thank you Prof. Ndubuisi Ekekwe for this economic analysis that I strongly align with. We do not tackle poverty and lack by mitigating or ameliorating it. Instead, we should focus on creating/catalyzing prosperity, so that scarcity, poverty and inflation are indirectly tackled too.

This is why I posit that for Africa to thrive economically under the clean energy transition, affordable (low-cost) energy must be made available in large quantities to boost local productivity. This will also protect our local markets from cheaper imported alternatives.

While we must commend what is being done in Africa now in replacing fossil-fuel generators with solar PV energy, our vision should be bigger: large-scale production of “cheap” sustainable energy for high-value agricultural value-chain, manufacturing and AI/data-science technological competitiveness.

You can please see details on this from my recent writing for The London School of Economics and Political Science (LSE) here: https://blogs.lse.ac.uk/africaatlse/2023/10/02/locally-generated-electricity-might-not-be-the-most-efficient-route-for-african-energy-transition/