Yemi Cardoso, governor of the Central Bank of Nigeria (CBN) said that inflationary pressures are expected to decline in 2024 due to the institution’s inflation-targeting policy which aims to rein in inflation to 21.4 percent.
“This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power,” he said.
He said this at the launch of the NESG 2024 Macroeconomic outlook report today, with the theme: “Economic Transformation Roadmap: Medium Term Policy Priorities”
He said that the CBN adoption of the inflation targeting framework involves clear communication, the use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, and posture market confidence are positively influences consumer behaviour.
The governor said that the outlook for decreasing inflation in 2024 will have a profound impact on businesses providing a more predictable cost environment and potentially leading to lower policy rates, stimulating investment, fueling growth, and creating job opportunities.
“Additionally, the bank has reverted to the conventional monetary policy approach with a focus on attaining price stability, which fosters sustainable economic growth for Nigeria,” he said.
He mentioned that the projections for the nation’s economy paint an optimistic trajectory as the federal government of Nigeria anticipates real GDP growth of 3.67 percent in 2024.
He also mentioned the efforts of the CBN in collaboration with other institutions to ensure all FX inflows go through the CBN.
“ Our initiatives on FX, we are pleased to note our collaboration with the Ministry of Finance and the NNPCL to ensure that all FX inflows are returned to the central bank. This coordinated effort will greatly enhance the bank’s FX flows and contribute to the accretion of reserves.”
Cardoso said the expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum products imports and the recent implementation of a market-determined exchange rate policy by the Central Bank of Nigeria.
“This reform is designed to streamline and unify multiple exchange rates fostering transparency and reducing arbitrage opportunities. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment elevating Nigeria’s appeal to global investors,” he said.
He also mentioned that the CBN has implemented a comprehensive strategy to improve liquidity in our FX markets in the short, medium, or long term.
“Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.
“With the completion of an independent forensic review, we are addressing the backlog of valid FX transactions and we remain steadfast in our commitment to decisively address any infractions and abuses,” he said.
He said in efforts to stabilize the exchange rate, they must prioritise transparency and create a market environment that enables the fair determination of exchange rates.
“We believe that the naira is currently undervalued and coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term, This coordinated approach will contribute to a more balanced and stable exchange rate.”
He said that the NESG theme underscores the requirement for a clearly outlined roadmap, comprising distinct yet interconnected phases and essential policy recommendations that resonate with him.
“We have just last week, launched a new five-year strategy for the Central Bank of Nigeria for the period 2024 to 2028 that provides a clear roadmap for achieving a mandate anchored on the following themes; price stability or Monetary policy effectiveness, robust and resilient financial system, governance compliance and advisory to government,” he said
The governor said that these form the pillars around which all our actions and activities would involve and enable us to deliver on our mission to ensure monetary price and financial system stability as a catalyst for inclusive growth and sustainable economic development.
