The Central Bank of Nigeria (CBN) has projected that the rising headline inflation in Nigeria will continue to moderate into the third and fourth quarters of 2024.
Data from the Nigeria Bureau of Statistics (NBS) showed that “In April 2024, the headline inflation rate increased to 33.69% relative to the March 2024 headline inflation rate which was 33.20%.” The CBN has in three consecutive Monetary Policy Meetings (MPC) raised the benchmark interest rate to rein in inflation.
At a recent CBN-hosted Dialogue with the Nigeria Economic Summit Group (NESG) to boost the economy, the CBN Governor, Dr. Yemi Cardoso said the actions by the CBN is yielding appreciable gains.
The gathering also had participants from the Organised Private Sector (OPS) and the Bank’s leadership to explore strategies for enhancing Nigeria’s financial sector.
The CBN presented a detailed explanation of the economy’s trajectory, the reasons behind the recent aggressive Monetary Policy Rate hikes, and the expected transmission timeline into the economy during the meeting.
He also highlighted the deceleration of month-on-month inflation and expectations of moderation in headline inflation going into the third and fourth quarters of 2024.
The meeting held at the Bank’s Lagos office on Wednesday, June 19, 2024, emphasised on exploring how broad-based monetary policy communication and guidance can positively influence the global investment community’s perception of Nigeria and on determining the right bundle of monetary policies and interventions to increase the productive sector’s growth.
In addressing the need for improving monetary policy communication and guidance to positively influence the global CFO and investing community’s perception of Nigeria, the CBN Governor, Mr. Olayemi Cardoso emphasised the importance of private sector input in shaping economic policy.
“The private sector is a critical engine of our economy,” he said. “This meeting underscores our commitment to working collaboratively with stakeholders to create a more robust and investor-friendly financial environment.”
Stakeholders at the meeting also pledged to establish a framework for collaboration and consistent interactions with the top leadership of the OPS to harmonise economic policy and guarantee the CBN’s effective support of the private sector in partnership with the Nigerian Economic Summit Group (NESG).
The CBN Governor also presented a detailed explanation of the economy’s trajectory, highlighting the deceleration of month-on-month inflation and expectations of moderation.
He also said the Bank would continue improving monetary policy communication through forward guidance to domestic and global investors.
The CBN Governor also assured the private sector leaders of their commitment to building trust, ensuring price stability, and implementing monetary policies to support economic growth, improve stability in foreign exchange rates, and effectively moderate inflation.
He assured them that despite current drawbacks, the Bank had consistently improved FX supply while protecting the interests of all parties. In addition, he stressed the importance of restoring confidence and trust in the Nigerian economy for all investors, local and foreign.
Mr. Cardoso also noted that the policy measures deployed by the CBN aim to build a transparent economy that will boost investors’ confidence and improve the country’s business environment.
During his remarks the President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, appreciated the CBN’s open dialogue and interest in ensuring the manufacturing industry and other organised private sectors are abreast of CBN policies. He said the OPS was concerned about how the price verification system is currently operated and, in agreement with the CBN, will provide the CBN with specific details about the concerns and suggestions for implementable improvements to the system.
During the discussions, other private sector leaders expressed concerns about the elevated impact of macroeconomic risks on business costs across various industries. They noted that while structured development finance support may not directly increase cash supply, it enhances the capacity of the productive sector to manage risks such as exchange rate volatility. They also emphasised the importance of the role of the Central Bank of Nigeria in catalysing trade finance and development finance support through traditional institutions.
