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Nigeria’s Economy On Right Track

Oluwasina Phillip

The Central Bank of Nigeria on Friday expressed optimism that with its recent policies that are being implemented in various segments of the economy, the country will begin to see inflation trending downwards to as low as 13 per cent by December this year.

The CBN Director, Monetary Policy Department, Dr Hassan Mahmud said this at the Mid-year Economic Review and Outlook 2021, organised by the Chartered Institute of Bankers of Nigeria’s Centre for Financial Studies, in collaboration with B. Adedipe Associates.

In Nigeria, annual inflation moderated for three consecutive months to 17.75 per cent in June. The divergence between the global and Nigerian inflation trends has been a subject of controversy in the last three months.

But Mahmud said there were positive sides to Nigeria’s economic growth, despite uncertainties in the domestic and global economy.

He said if policy challenges with exchange rates, insecurity, among others, were addressed effectively, the country would start seeing some positive projections into 2021 and the beginning of 2022.

“Also, if the CBN forecasts for GDP growth are sustained and there is improved vaccination and the health hazards and lockdowns are not resurfacing, we will see GDP getting close to three per cent by the end of 2021.

“We will also see the inflation number coming down less than 13 per cent by the end of the year and further down to the NBS projection of single digit by 2022 or the middle of 2022.

“We will start seeing a downward trend in inflation numbers particularly, headline inflation,” he said.

Mahmud added that food inflation should also go down substantially if the supply side of it was addressed and security issues abated.

He said inflows should also improve substantially over the rest of the year given that market confidences were already building, particularly, in the financial sector.

Dr Biodun Adedipe, Chief Consultant of BAA Consult, said if the oil sector was positive in terms of prices and production volume and export volume, it would go a long way in driving growth.

“At BAA, our projections for Nigeria economic growth for 2021 had remained 2.54 per cent since February and we have maintained it so.

“If the prognosis, the oil sector in Nigeria is positive in terms of price, production volume and export volume, that goes a long way in driving growth and changing some of what we see as headwinds and risks,” he said.

Earlier, Dr Bayo Olugbemi, CIBN President, said the event was the brainchild of the CIBN Research Committee.

He said it was aimed at providing insights for business leaders and key decision makers, who had responsibility to deliver on specific mandates irrespective of the prevailing uncertainties and disruptions in the Nigerian economy.

“There is a strong need for further guidance to help individuals and businesses make informed and strategic decisions that will help them weather the storm,” said Olugbemi. 

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