CBN projects 15% decline in inflation 2023

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Godwin-Emefiele

Governor, Central Bank of Nigeria, CBN, Emefiele has projected 15 per cent  decline in inflation rate 2023.

He stated this in a keynote address delivered at the annual Bankers Dinner Night of the Chartered Institute of Bankers of Nigeria,  CIBN, where he also presented an outlook for the nation’s economy in 2023.

Speaking on the on economic growth in 2023, Emefiele stated that “Based on the expectation of a robust non-oil performance, and barring any unforeseen shocks, GDP growth rate is projected to remain positive in the remaining quarter of 2022 and during 2023.

“The performance of the non-oil sector will be buoyed by the continued efforts at entrenching indigenous productivity in high-impact real sector activities.

“Domestic aggregate demand is further expected to be bolstered by the anticipated budgetary outlay and the surge of electioneering spending in the next few months.”

On the inflation trend in 2023, Emefiele said, “Inflation expectations are rising as existing structural rigidities are compounded by global factors and anticipated elections related liquidity upsurge.

“For the rest of 2022 and towards mid-2023 Nigeria’s rate of inflation is projected to remain elevated and above the 12.5 per cent growth-aiding threshold.

“However, on the backdrop of our previous policy measures, and as the effect continues to permeate the system, our inhouse model-based simulations indicate that inflation rate could fall steadily to less than 15 per cent by end-2023,” he said

Emefiele also dislosed that tackling the problem of oil theft is critical to building robust foreign exchange reserves and achieving a stable Naira exchange rate.

He said that the Naira redesign policy is aimed at achieving specific purposes including curbing the upward inflationary trend in the country.

In his words, “This policy will quicken the attainment of a cashless economy as it is complemented by increased minting of our eNaira. It will curtail currency outside the banking system and, as monetary policy becomes more efficacious, help to rein in inflation.

“Based on the ever-escalating challenges that are inundating currency management in Nigeria, with grim consequences for our sovereign integrity, the CBN recently announced its policy to issue newly redesigned Nigerian banknotes.

“Analysis of the key challenges primarily indicated a significant hoarding of banknotes, as over 85 per cent of currency in circulation were held outside the banking system.

“Whilst the global best practice is to undertake currency redesign every 5–8 years, our existing banknotes have remained unchanged in almost two decades.

“It is therefore no longer tenable to continue with business as usual; especially given the continually evolving circumstances that could impinge the optimal performance of the Naira,” he said.