The Central Bank of Nigeria (CBN) appears to be pleased and is prepared to maintain its previous policy directions in light of the International Monetary Fund’s (IMF) flat rate prediction for Nigeria’s economic growth rate in 2023 and 2024.
While the IMF kept its 2023 projection of 3.2 percent, it lowered its 2024 forecast to 3.0 percent from 3.1 percent. From 3.0 percent, the World Bank’s prediction was reduced to 2.8 percent.
The CBN Governor, Godwin Emefiele, said in a press conference on the sidelines of the ongoing World Bank and IMF Spring Meetings in Washington, DC, today that the IMF is endorsing the monetary and fiscal authorities’ policies by maintaining its 3.2 percent forecast for 2023.
He said: ‘‘We are delighted that in Sub-Saharan Africa, the growth levels in Nigeria, even though by our assessment is still sub-optimal, that the IMF would, among all the countries in Africa, say that growth in Nigeria should be retained at 3.2%; it gladdens our heart.
‘‘The forecast at the meeting remains that yes, a lot of work has been done in 2022, and growth is gradually returning again, but it is still at the sub-optimal level. Inflationary pressures continues, and even though inflation is coming down as a result of measures being taken by monetary authorities to bring down the inflation rate, it still remains at very high levels globally to the extent that even as global inflation is projected at 7 per cent it remains very high. And the high point of all the consequences of what we’ve seen in 2022 is that poverty which was very well discussed here has risen quite astronomically and over 700 million people are being struck by poverty.
‘‘Food insecurity has also risen quite tremendously to the extent that over 350 million people globally are hit by extreme food crises.
‘‘The IMF also talked about the fact that the debt portfolios and lending portfolios have reached all-time highs. In two decades, this is the highest level of debt portfolio that the IMF has seen in its books and unfortunately warning that they may not be in a position to do much for countries that really require more money to be able to restructure the balance sheet and then keep going on.
‘‘So, the focus remains that monetary policy authorities must continue to focus on inflation so as to continue to bring it down.
‘‘While monetary authorities are doing their work, to bring down inflation, they must also keep their eyes on banking systems’ stability, through monitoring, supervision, and regulatory frameworks and the rest of them.
‘‘For the fiscal, of course, because of the limited fiscal space, the IMF insists that countries need to reduce their spending but, in my case, I will say, well if you want to spend then raise revenue to be able to spend. I think it’s important that we must raise revenue and not get ourselves constrained in an environment where there is no debt, where financial market conditions are very tight and very limited, and where interest rates are high and could create a lot of burden for economies and the only option for fiscal in this case is to expand the revenue base so as to be able to spend’’.
“It means we are doing certain things that are correct, and we’ll continue to do those things that are right.
‘‘But it also means that we are not going to remove our eyes on monetary policies, which is to focus extensively on how to moderate inflation, but at the same time, ensure that banking system stability remains resilient and then strong as it is right now.”
