Monetary Policy between

Germany and Nigeria

MARIA JULIAN

Monetary Policy
Nigeria
Major producer of crude oil

Central Nigerian Bank (CNB)

governs the monetary policy

Strongest economy in the eurozone

4 monetary committees to
sustain price stability

European Central Bank (ECB)

since 1999

No longer decides own monetary

policy domestic needs

Germany

Germany

Prior to the monetary policy implementation

Consists of 16 federal states, which is a part of the federal republic

called Lander.

In order for Germany to maintain its financial stability, the

Bundesbank is a constant presence in all of the national and
international institutions.

Monetary policy obtains monitoring through macro prudential

supervision.

Germany Cont..

Germany cont.
Germany

has been a supporter in the Nigerian

power industry and their micro to medium sized
enterprises.

Issued

a $200 million credit along with a 5

million

Removal

of physical barriers

Germany cont.
ECB

setting compulsory minimum-reserve

requirements at banks

Unprecedented

actions to combat to financial

crisis
Stimulation
Purchase

of the credit markets

of Euro dominated bonds

Nigeria

Monetary policy committees

Review economic and financial conditions in the economy

Determine appropriate stance of policy in the short to medium term

Review regularly, the CBN monetary policy framework and adopt

changes when necessary.

Communicate monetary/financial policy decisions effectively to the

public and ensure the credibility of the model of transmission
mechanism of monetary policy

Nigeria cont.

Nigeria cont..

Partnerships with Germany

Education

Energy

Culture

Poverty reduction

Human rights

Nigeria cont.

Reserve management

Payment System Vision 2020 initiative

Implementation
Issuance

of Bank Verification Number

of Guidelines on International Money Transfer services in

Nigeria
Issuance

of revised Guidelines for card issuance and usage in Nigeria

Industry

e-reference portal

Abolishing

fees on cash deposits above the cash-less policy threshold

Analysis and Conclusion

Both Germany and Nigerias goal is to maintain price stability

Germanys price stability strategy is carefully managed and supervised

by the ECB. In contrast, Nigeria is not a member of such a union and
decides its own directions that dictate its price stability.

Germany is a member of the EMU, its monetary policy comes from the
ECB and its Governing Council, which decides monetary policies for all
member countries. Nigeria on the other hand decides its own monetary
policy and is governed by the CBNs Monetary Policy Committee, one of
four committees that dictate Nigerias financial/economic sector.

Analysis and Conclusion

Germany is a model for which modern monetary policies are tailored for
because of its highly developed and competitive financial system.

Nigeria and Germany are worlds apart when comparing its monetary
policies. Germany has the economic infrastructure to carefully manage
its monetary policy. Nigeria is a developing economy that has great
potential if the proper processes are put in place to minimize both the
ongoing corruption and lower its inefficiencies.

Both countries are at different stages of development and with that

come different operating priorities.

Analysis and Conclusion

The sum up the comparison of these two
countries is simply put like this, Germanys
efficiency and effectiveness is what any
country would like to achieve and in Nigerias
case emulate it as close as possible.

Questions none Thank you