Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), emphasized that ongoing inflation may necessitate continued monetary tightening measures, potentially affecting the nation’s growth prospects. In the foreword of the CBNs inaugural Macroeconomic Outlook for Nigeria, Cardoso suggested that the central bank will likely maintain its high-interest-rate policy if inflation persists.
This outlook follows the recent report from the National Bureau of Statistics (NBS), which showed an increase in the inflation rate for June, marking the first month-on-month rise since February 2024.
Cardoso pointed out several risks that could impact Nigeria’s positive domestic outlook, including security challenges, supply-side disruptions, and global economic fragmentation. These issues and existing structural imbalances could lead to prolonged monetary tightening and reduced growth potential. He mentioned that factors such as oil theft, pipeline vandalism, and potential declines in crude oil prices could further constrain fiscal space and foreign exchange stability.
Despite these challenges, Cardoso remains optimistic about Nigeria’s economic resilience. He projected growth to rise from 2.74% in 2023 to 3.38% in 2024, driven by domestic oil production and refining capacity improvements. While inflation is expected to remain high, it is forecasted to decrease to 21.40%, within a range of 19.84% to 25.35%, down from 28.92% in December 2023, aided by an inflation-targeting framework and stringent monetary policies.
Cardoso stressed the need for continued monetary tightening, enhanced foreign exchange market reforms, and effective coordination among government policy organs to address potential risks and ensure economic stability.
Written By Veronica Emmanuel