The voodoo of informed predictions

This morning I got a mail from a well-regarded source about the likely outcome of the bi-monthly Monetary Policy Committee (The MPC is a committee of the Central Bank of Nigeria) meeting coming up later in the day. The source argued that the MPR, LR and CRR would probably be left at 7.5%, 30% and 2% respectively. With a caveat that the prediction should be taken with a pinch of salt and she's not liable for any calamity that hits anyone who uses the prediction to make decisions. Come on! Even Jim Jones was better than this.

By the way, if you don't know what these acronyms stand for, don't bother; they mean absolute nothing, especially to the man on the street. They are some of the jargons we bankers put up to feel very self-important.

It would have been a story if the ratios weren't changed: I can't remember if any of the predictions ever made by my source came true. But I'm sure if Harold Camping's rapture hasn't taken place before the next MPC, my impeccable source would make another prediction and guess what, my own prediction is that she's going to be wrong, as usual.

The business world is replete with loads of analysts and self-styled experts but empirical evidence has shown we (too bad, seems I'm one of them) are not better than an army of random monkeys hitting away at the keyboards and a chance Shakespeare classic coming out. The publishing editors are thrilled and the monkeys have been given an advance for 4 more classics. You see, if you deal with a very large solution space (another jargon, another narcissistic comment) like I'm working on for my current project, anyone can get lucky.

The real disaster, of course, is confusing luck with expertise.

If you think I'm joking, read about what McKinsey and Company told AT&T in 1982.

Author: Adedeji Olowe

Adédèjì is the founder of Lendsqr, the loan infrastructure fintech powering lenders at scale. Before this, he led Trium Limited, the corporate VC of the Coronation Group, which invested in Woven Finance, Sparkle Bank, Clane, and L1ght, amongst others. He has almost two decades of banking experience, including stints as the Divisional Head of Electronic Banking at Fidelity Bank Plc. He drove the turnaround of the bank’s digital business. He was previously responsible for United Bank for Africa Group’s payment card business across 19 countries. Alongside other industry veterans, he founded Open Banking Nigeria, the nonprofit driving the development and adoption of a common API standard for the Nigerian financial industry. Beyond open APIs, Adédèjì works deeply within the fintech ecosystem; he’s the board chairman at Paystack. Adédèjì is a renowned fintech pundit and has been blogging on technology and payments at dejiolowe.com since 2001.

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