Central Bank of Nigeria (CBN) Blames Excess Liquidity on Supernatural Forces

In conventional monetary economics, theories explaining the phenomenon of inflation (that is, the rise in prices of goods and services over time) are the monetarist theory and the structural inflation theory, but last week the Nigerian central bank, CBN, proposed a supernatural theory of inflation.

In its analysis of inflation trends over past decades, the bank identified witch doctors, particularly operating in Benin, Edo, and some Southeastern states, for artificially increasing the money supply and causing inflation. The bank referred to the practice whereby clients seeking wealth and riches visit these witch doctors. They in turn provide the client with some container (typically a pot) from which they could 'withdraw' money contingent upon certain rituals and sacrifices being made; because the money given is not from existing money in circulation, this amounts to artificial increases in money supply. Moreover, because the client typically has to pay in terms of years of life and/or human sacrifice, this is also contributing to low life expectancy and high violent crime rate in the country. 

The bank has expressed frustration over its inability to get a hold of inflation, first due to the expansive use of cash in the country in the informal economy and shadow economy, and now due to practices in the supernatural economy. Its cashless policy and BVN (Biometric Verification Number) drives were aimed at overcoming some of these challenges, but there is concern over whether the witch doctors can adapt to technology. There is already evidence suggesting that due to the pressures of globalization and competition from India, the Caribbean islands, and other supernatural powerhouses, Nigerian witch doctors are finding new ways to stay competitive - one of which is embracing the fourth industrial revolution and becoming more technology savvy by investing in ICT and digital shrines, as well as computerized ritual processes that are still acceptable to the gods. Such trends may spillover into the supernatural economy. 

Sources suggest that there is already a rising fad among witch doctors to change their titles from 'baba' and 'native doctor' to divine consultants or spiritual analysts, demonstrating the increasing professionalism of the sector. Some have formally registered their shrines as legal businesses, adopting names such as "Power for Nada Ltd" and "Ogbanje and Sons".

However, an economist of the supernatural economy says that a cashless supernatural economy would make it much easier to detect supernatural increases in the money supply, as it would involve money appearing in the client's bank account from nowhere. Yet this optimism may be threatened by some observations that deities are advising witch doctors to hire yahoo boys as technology consultants in order to bypass banking security and digital accounting systems and mask digital money appearances in bank accounts. Even within the supernatural realm, sources say there are discussions of appointing a deity of technological capacity (given that there are deities for almost every aspect of reality), in an obvious attempt to catch up to the 21st century.

The bank has organized stakeholder meetings with the Association of Nigerian Wizards and Witches in an attempt to facilitate discussions about possible regulation of the supernatural economy.