From Adanna Nnamani, Abuja
The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, on Wednesday, said that the apex bank was putting measures in place to shrink the inflation rate in the nation to 21.4 percent in 2024.
Cardoso disclosed this during his speech at the the Launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report.
The CBN governor said the organisation intended to achieve the goal by adopting an inflation-targeting framework, improving agricultural productivity, and easing global supply chain measures that would benefit businesses.
In addition to having a significant influence on businesses and potentially leading to lower policy rates, Cardoso assured that the forecast for decline in inflation in 2024 would also encourage investment, spur economic growth, and generate jobs.
“Inflationary pressures are expected to decline in 2024 due to the CBN’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.
“The CBN’s adoption of the inflation-targeting framework involves clear communication, use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour. The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fuelling 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.
The CBN boss also disclosed that the bank was collaborating with the Ministry of Finance and the Nigerian National Petroleum Company Limited, (NNPCL) to ensure that all Foreign Exchange (FX) inflows are returned to the Central Bank.
This coordinated effort, he noted, will greatly enhance the Bank’s FX flows and contribute to the accretion of reserves.
“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.
“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.We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” Cardoso said.