VenturesNow

IMF predicts Nigeria’s inflation to drop to 18% by 2026

Published

2 weeks ago

April 17, 2024

The International Monetary Fund (IMF) has predicted that inflation rate in Nigeria will drop to 23 per cent in 2025 with a further drop to 18 per cent by 2026 from the current rate of 33.20 per cent.

The IMF, which made the protection in its Global Economic Outlook released on Tuesday at the ongoing IMF/World Bank Spring Meetings in Washington D.C, said Nigeria was moving in the right direction with economic reforms including exchange rate reforms which it believes contributed to the surge in inflation rate in March.

The report endorsed by
Division Chief, IMF Research Department, Daniel Leigh, noted that with oil prices being on the rise in part due to geopolitical tensions and services, inflation had remained stubbornly high in many countries, including Nigeria.

“We see inflation in (in Nigeria) declining to 23 per cent next year and then 18 per cent in 2026,” Leigh said.

“Growth in Nigeria, steady but actually rising this year, from 2.9 per cent last year to 3.3 percent this year. We have seen an expansion from the recovery in the oil sector, with a better security situation and also improved agriculture, benefiting from the better weather conditions and the introduction of dry season farming.

“So, there’s a broad based increase also in the financial sector, in the IT sector. Inflation, yes, it has increased.

“Part of this reflects the reforms, the exchange rate and its pass through into other goods from imports to other goods.

“So, this explains also why we revised up our inflation projection for this year to 26 per cent. But with the tight monetary policies and that interest rate increase, significant interest rate increases during February and March,” he added.

On his part, head of IMF Research Department, Pierre Olivier Gourinchas, said Nigeria has six to nine per cent inflation target which has been missed by over a decade, but he however, believes bringing inflation back to target should remain the priority for the country.

“There are stark divergences also between countries that call for careful calibration of monetary policy.

“Going forward, policymakers should prioritize measures that help preserve or even enhance the resilience of the global economy.

“A key priority is to rebuild fiscal buffers, especially in an environment with high real interest rates, modest growth, and elevated debts.

Unfortunately planned fiscal adjustments are often insufficient and could be derailed further given the record number of elections this year,” Gourinchas said.

Related Topics:Economy Featured IMF inflation Nigeria

Click to comment

VenturesNow

Nigeria gets $600 million investment from Danish firm Moller-Maersk

Published

17 hours ago

April 29, 2024

Ifeoluwa Dada

Nigeria’s presidency said on Sunday that President Bola Tinubu had secured an investment of $600 million from Danish shipping and logistics company, A.P. Moller-Maersk.

Nigerian ports will get more space for container shipping services as part of the deal by improving their facilities.

A presidential spokesman, Ajuri Ngelale, said in a statement that the decision was made by Mr Robert Maersk Uggla, Chairman of A.P. Moller-Maersk, during a meeting with President Tinubu on Sunday in Riyadh, Saudi Arabia, at the World Economic Forum Special Meeting on Global Collaboration, Growth, and Energy for Development.

”We have seen a significant opportunity for Nigeria to cater for larger container ships. Historically, most of the West African coasts are already served by smaller ships. Currently, we see an opportunity to deploy larger ships to Nigeria. To achieve this, we need to expand the port infrastructure, especially in Lagos, where we need a bigger hub for logistics services. The growth potential is hard to quantify,” Ngelale quoted Uggla as saying.

”We believe in Nigeria, and we will invest $600 million in existing facilities and make the ports accommodating for bigger ships.”

Tinubu, for his part, thanked the company for what it did for the Nigerian economy.

“We appreciate your business and the contribution you have made and continue to make to our country’s economy over time. We do not take our partners for granted. A bet on Nigeria is a winning bet. It is also a bet that rewards beyond what is obtainable elsewhere,” Tinubu said.

“More investment opportunities are available, and my government has worked on various reforms to encourage investments. We need to encourage more opportunities for revenue expansion and minimize trans-shipments from larger ships to smaller ships.”

VenturesNow

Nigeria: Bureaux De Change operators to harmonise retail FX market

Published

1 day ago

April 28, 2024

Ifeoluwa Dada

Amidst the volatility around the Nigerian currency and its foreign exchange market, the Association of Bureaux De Change Operators in the country has revealed plans for a unified retail end of the foreign currency market.

In a statement released on Saturday, the association said that the move would reduce volatility and improve regulatory compliance in that market sector.

The lack of dollars has had a huge effect on Nigeria. In the past few weeks, the naira has hit all-time lows, and the central bank has had to weaken the currency twice in less than a year and launched campaigns against currency racketeers as well as other policies like banning Binance and other crypto companies’ online sites through the Nigerian Communications Commission to stop what the government saw as ongoing manipulation of the foreign exchange market and the illegal flow of money.

Aminu Gwadabe, President of ABCON, said that the organization was putting plans in place to bring together market operators from different backgrounds. These plans included starting state groups to coordinate, integrate, and run a single market structure.

Gwadebe said that all BDC owners in Nigerian markets would be taken care of when it was done. He also talked about plans to improve its Business Process Platform, which used to be known as SAAZ Master.

He said, “Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to locate BDCs offices for effective and seamless transactions easily.”

He said again that a strong retail end forex market would help the Central Bank of Nigeria reach its goal of real price discovery for the naira, as well as meet international obligations and national goals, make it easier for security agencies to monitor and supervise, and give BDC players a better view of the market.

Gwadabe says that the goal of a unified retail end forex market will help with the creation of market intelligence reports, improve the image of BDCs, other players, and market operators both locally and internationally, and create more jobs.

Gwadabe said that if this plan is carried out well, it will help the government make money through a digitalized retail end market and create a well-structured, open, and competitive platform to stop the threat of illegal platforms.

“With the world going digital, BDC operators under the ABCON leadership are committed to staying ahead of the competition by deploying time-tested technology to deliver effective services to foreign exchange end-users.

“Finally, we also condemned in its entity, the seeming reappearance of illegal economic behaviours in forex conversion and peer-to-peer trading that pose another recent surprise in naira volatility and I therefore want to warn that while surprises are the new normal, resilience is also the new skills,” Gwadebe explained.