The Central Bank of Nigeria (CBN) has projected that Nigeria’s real sector output will grow by 3.38 percent in 2024 from 2.74 percent in 2023, due to increased investments in the oil and non-oil sectors.
According to its debut outlook titled ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’, “the outlook for the Nigerian economy indicates broad resilience, with continued growth, expected moderation of inflation, and greater exchange rate stability.”
Read also: CBN to maintain hawkish stance as inflationary pressure persists
Here are seven economic projections the CBN made in its macroeconomic outlook
Inflation
The apex bank projected that inflation will moderate to 21.40 percent by the end of the year within a range of 19.84 and 25.35 percent, from 28.92 percent in December 2023 putting a further rate hike in focus.
Nigeria’s annual inflation rate ticked up to 34.19 percent in June 2024 due to rising food prices, making it the fourth-highest inflation rate ever since 1996.
Olayemi Cardoso, the governor of the Central Bank of Nigeria(CBN), stated that the Bank would extend its monetary policy tightening stance to tame persistent inflation.
“Core inflation is expected to moderate in 2024 due to sustained restrictive monetary policy stance. The recent adoption of the inflation-targeting lite framework will anchor inflation expectations in 2024, in addition to the favourable effect of moderating global inflationary pressures,” the report said.
Capital Market
The CBN expects the Capital Market to remain bullish in 2024 off strong 2023 corporate returns. The yield curve is also expected to shift upwards and remain normal in 2024.
“Analysis of the market momentum, using the 125-day historical trend, shows that the actual ASI is greater than the historical average, implying rising investor confidence in the capital market,” the report said.
External Reserves
According to the report, the external reserves would decline marginally in 2024 after repaying outstanding FX, matured foreign exchange swaps, and debt service obligations.
“The expected improvement in crude oil earnings together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves,” the report stated.
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Exchange Rate
CBN expects, that improved investor confidence, higher remittances and a rise in crude oil export receipts, would stabilise the exchange rate.
“The recent reforms in the foreign exchange market are expected to entrench efficiency and transparency, narrow the gap between the BDC and the NAFEM rates, and stabilise the exchange rate. The expected rise in crude oil export receipts would provide further impetus to the market, moderate depreciation pressures and strengthen the naira,” the report said.
Balance of Payments
In 2024, imports are expected to decline by 7.18 percent due to a decline in oil imports and the anticipation of operations in local refineries like the Dangote and Port Harcourt refineries.
However, exports are expected to rise by 1.24 percent to $55.21 billion in 2024, from $54.53 billion in 2023, “arising from the sustained growth in oil and non-oil exports”.
“The current account is projected to record a higher surplus of $6.96 billion in 2024 from $5.31 billion in 2023, driven by sustained trade surplus from robust export performance and increased diaspora remittances,” the report said.
The External Sector
The external sector is expected to improve in 2024, driven by a favourable trade balance, increased domestic oil production, high crude oil prices, and the operationalisation of the Dangote and Port Harcourt refineries.
The Fiscal Sector
According to the report, the Federal Government revenue would grow by 134 percent to N19,598.47 billion in 2024 from N8,361.84 billion estimated for 2023.
Crude oil and gas sales/royalties and minerals and mining will account for 39.2 percent, while taxes will contribute 21.7 percent of the projected government revenue in 2024.
“The CBN decided to embark on the publication of Macroeconomic Outlook for the Nigerian Economy to anchor expectations and shape economic outturns,” the report said.
