• Friday, July 19, 2024
businessday logo

BusinessDay

Rewane sees Nigeria’s inflation easing, says economy improving

Bismarck Rewane

Bismarck Rewane, the chief executive officer of Financial Derivatives Company has predicted that Nigeria’s headline inflation will begin to cool from July, albeit slowly.

Featuring as a guest on Channels Television on Thursday, the economist stated that the month-on-month decrease of the country’s inflation points to the direction that prices have begun to slow.

“The inflation numbers came out on Saturday and pointed to a particular type of picture which is that the rate of increase in price levels has actually begun to slow down, and therefore we are projecting that inflation begins to decline from the month of July,” he said.

“We think that give or take with how the minimum wage is handled, we will begin to see moderation in rate of inflation in the month of July into August — not drastically, but what we call disinflation will begin to kick in at that time. So there is a flicker of light at the end of the long tunnel,” Rewane added.

He further stated that with inflation cooling, Nigeria’s economy is expected to improve while the hardship pervading the country subsides.

“After difficulty and chaos comes light at the end of the tunnel, I think that cautiously we are optimistic that things are going to start improving slowly,” Rewane said.

Nigeria is currently faced with a near three-decade high inflation reaching 33.95 in May for the 17th consecutive rise from 33.69 percent in April 2024.

Though the month-on-month figure shows a two-month decline, prices of food and essential commodities have remained high.

According to the National Bureau of Statistics, food inflation increased to 40.66 percent in May from 40.53 percent in April, throwing millions into hunger as prices more than doubled.

This increase was driven by higher prices for millet flour, garri, beans, wheat flour (prepacked), semovita, and other food items.

Reacting to the exit of some multinationals in the country, Rewane said just as some are leaving the country, others who can withstand the business environment are coming in.

According to him, “What is more important in economics is what the future holds rather than what the past has shown”.

No fewer than five multinationals have exited Nigeria in less than one year. This exodus comes at a time when the country’s illiquid economy needs foreign direct investment and dollar liquidity to stabilise the fragile economy.

Many of the multinationals have cited the unstable exchange rate and harsh economic conditions of the country for their exit.

Meanwhile, the FDC chief said: “Some are exiting, some are downgrading while some are coming in, those that have tolerance, and the capacity to manage the difficult situations, those ones are coming in”.