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CBN projects 11.7% inflation end 2019, GDP to grow by 2.5% in Q4

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The Central Bank of Nigeria (CBN) on Friday projected inflation to increase slightly by 11.7 percent by the end of 2019 from 11.6 percent currently, and then moderate thereafter supported by the apex bank’s efforts at improving domestic production of staple food items.

Also, the current tight monetary policy stance of the CBN is expected to continue in the near-term, especially in view of rising inflation expectations.

From 2.28 percent in quarter three of 2019, growth is projected to quicken to 2.5 percent by the fourth quarter of 2019.

Godwin Emefiele, governor of CBN, gave these projections while delivering a keynote speech at the bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) at the weekend.

Though the CBN has so far managed to maintain exchange rate stability, Emefiele said the current capital flow reversals from emerging markets are expected to continue to exert considerable pressure on market rates.

“Notwithstanding these pressures, the CBN is determined to maintain its stable exchange policy stance in the near to medium term given the relatively high level of reserves,” Emefiele said.

In the I&E window, he said over $60 billion worth of transactions have taken place since the inception of the window in April 2017.

“We intend to address some of the barriers faced by non-oil exporters in producing goods for the export market,” he said.

Working with the Nigerian Export Import Bank, he promised to improve access to the N500bn facility designed to support the growth of Nigeria’s non-oil exports.

“Part of our emphasis will be on increasing export of value-added goods relative to raw materials. Firms that have access to these facilities would be able to obtain loans at single digits,” he said.

In order to reduce the time lag required to export non-oil products, Emefiele said the CBN had launched an automated NXP portal, which will reduce the time it takes to process critical export documents from two weeks to less than 10 minutes. This measure will support efficiency gains for firms primarily focused on the non-oil exports market.

“We believe by taking these actions, we can improve Nigeria’s non-oil export earnings from close to $2bn in 2019 to $4bn by 2020,” he said.

Emefiele noted that Nigerian banks are some of the most reluctant lenders in major emerging markets, with an average loan-to-deposit ratio below 60 percent.

“I say this because, in comparison with our peers, South Africa has an LDR of 90 percent and about 76 percent in Kenya. Our LDR rate is therefore low. Our efforts so far are, however, yielding fruit as gross credit increased by 5.3 percent to N16.4 trillion ($45.5bn) by the end of September 2019 from May 31, 2019,” he said.

He noted that as a result of the CBN’s policy measures, in 2019, over $400m has been invested in fintech companies, focused on supporting improved payment services in Nigeria.

The CBN governor at the event launched a N1 billion Bankers’ Charitable Endowment Fund.

The Bankers’ Charitable Endowment Fund will fund a major charitable initiative every year starting in 2020.

“While several intervention initiatives will no doubt have attendant social benefits in communities, the Bankers’ Charitable Endowment will directly fund strategic social programmes in states and local communities across Nigeria,” Emefiele said. “The CBN remains open and committed to working with all well-meaning parties towards supporting the growth and progress of our country Nigeria.”

In his welcome address, Uche Olowu, president and chairman of CIBN council, said in the last one and a half years, “we have raised the quality of our programmes and products”.

“In fulfilment of our mandate as the Sole Accreditation Agency under the Competency Framework, we have continued to ensure Quality Assurance through Accreditation of Bank Academies and Educational Training Service Providers (ETSPs) including the Central Bank of Nigeria Learning Centre. We have succeeded in changing the narratives of our great Institute, we have elevated our brand visibility, we have supported the economy, supporting not only financial inclusion but economic inclusion. We believe we have left a legacy. Will the future judge us right? We leave that to posterity,” Olowu said.

Olowu said the Institute has positioned itself for the future by focusing on capacity building and content development even as it grooms the workforce of the future.

HOPE MOSES-ASHIKE