The Central Bank of Nigeria is forecasting a GDP growth rate of 3.2 percent in 2022, according to the 2022 economic outlook presented by CBN’s governor, Godwin Emefiele.
According to the head of Nigeria’s apex bank, the country’s growth forecast is upgraded to 3.1 percent in 2022 on the back of several interventions taking place in the country.
“Though vulnerability remains due to the persistent effects of the COVID-19, the Nigerian economy is projected to strengthen in the near-term. With the nearly 2.9 percent growth estimated for the 2021 fourth quarter and the better-than-expected 2021 third-quarter outcome, CBN growth forecast for 2022 was upgraded to about 3.1 percent as against a contraction of -1.92 contraction in 2020.”
The CBN Governor also explained that the bank is focused on fast-tracking growth “above historic levels” which suggests he is looking for growth in the region of 6-7 percent last recorded in the early years of the Jonathan administration.
“Our medium-term goal is to fast-track growth above the historic average. Economic activities may reach pre-pandemic levels if the resilience of non-oil activities (especially agriculture and manufacturing sectors) are given continued impetus.”
“As business sentiments brighten, following our various supply-side support and orderly implementation of macroeconomic policies, l expect domestic fragility to diminish with benign knock-on effects on welfare and livelihood.”
On inflation, the CBN boss said short-term projections indicate further moderations in expected inflation, especially as development financing continues to resolve supply rigidities.
On the exchange rate, Adamu Edward Lametek, a member of the committee believes the policy of excluding BDC’s from sourcing FX from the CBN has helped stabilize the exchange rate at the black market and opines this will continue to improve in 2022.
“Apparently, the revised FX management strategy, which excludes BDCs from direct sales, is working as a substantial share of FX demand has migrated to the DMBs’ window. We should expect this pattern to continue in the coming months as confidence in the modified framework grows.”
On subsidy removal and its impact on external reserves, Mike Obadan, one of the MPC members, expects subsidy to be removed in 2022 and the Dangote Refinery coming on stream this year. He believes this could have a positive impact on our external reserves.
“Perhaps, when petrol subsidy is eliminated sometime next year, as the Federal Government has indicated and the Dangote refinery starts to meet domestic needs for fuel, foreign exchange reserves will be significantly boosted to enhance exchange rate stability through increased interventions by the Bank in the foreign exchange market.”
Mike Obadan also believes the anticipated increase in interest rates abroad could trigger capital outflows from the country.
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