Global News: Calls for a Price Cap on soaring Kebabs costs in Germany
CBN asks banks to charge 0.5% cybersecurity levy
German politicians are calling for a price cap on the doner kebab, with chancellor Olaf Scholz admitting that the question of what has been dubbed “donerflation” is one he gets asked “wherever I go”.
Our thoughts
This is becoming a global trend🙈 and a stark reflection of the global economic situation! Inflation is biting hard and despite news (and numbers) showing a drop in inflation (in some quarters), the reality is that the real humans of the world aren’t seeing this ‘drop’
It has something to do with how inflation rate is computed.
Imagine driving on the Autobahn (the famous no speed limit road) from Berlin to Munic. The actual distance is ~600km. If you drive at 80km/hr, you’ll get there in 7.5hrs. If you increase speed to 100km/hr, you’ll get there in 6hrs.
The inflation rate is simply a measure of the speed with which prices are rising. If the speed increases from 80 to 100, inflation increased by 20%, if it decreases from 80 to 60, inflation decreased, but fundamentally, you are still heading to Munic (aka prices are still rising).
What we actually need is a deflation, ie a ‘U’ turn. A change of direction back to Berlin. That's when consumers will begin to smile again!
Until then, hang in there!
African News: Amazon launches online shopping in service South Africa
Amazon launched its online shopping service in South Africa on Tuesday, challenging a number of online retailers dominated by Naspers' Takealot.com.
Africa's most advanced economy is usually seen as a good entry point for companies to expand into the continent and Amazon could be doing the same, analysts have said in the past.
Our thoughts
Amazon’s entry into SA is a reflection iof their advancement in logistics management and general purchasing power of the people. No one is going to establish a consumer business in a stifled economy and competition is always good for the buyer.
May their stay be long!
Nigerian News: CBN asks banks to charge 0.5% cybersecurity levy
The Central Bank of Nigeria has ordered banks operating in the country to start charging a cybersecurity levy on transactions.
A circular from the apex bank on Monday disclosed the implementation of the level would start two weeks from today.
Our thoughts
This news raised a whole lot of dust in the past week. The Senate came out to order a halt in implementation. But does the Senate really have the powers to stop an Act from being implemented?
There’s something called Laffer curve in economics
The laffer curve theory posits (yes posits😀) that after a certain point of taxing, government revenue will begin to dwindle.
Paying 50k in taxes to transfer 10m (apart from COT and other bank charges can result in a few changes
Instruct your vendors to open account in the same bank (bank loses transfer revenue, no levy to govt)
Or people go back to cash (bank loses revenue, no levy to govt)
Or people begin to cut cheques again (Bank gets COT revenue, govt losses stamp duty + no levy to govt)
You get the message… As inflation keeps worsening and people become increasingly aware of every Naira spent, behavioural changes will naturally occur.
Whats happening at the Money Wit Club…..
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