CBN projects sustained positive economic growth

CBN Governor, Mr Godwin Emefiele

By Kennedy Nnamani

THE Central Bank of Nigeria, CBN, has projected that the Nigerian economy is expected to remain on the path of sustained positive growth.

According to the communique issued on Tuesday after the CBN’s Monetary Policy Committee meeting, the projection was made due to the expected strong performance in the fourth quarter of 2022 and steady rebound in economic activities.

Following the data from the National Bureau of Statistics, NBS, the CBN noted that the economy has sustained positive output growth for seven consecutive quarters, following the exit from recession in 2020.

It attributed this growth largely to the growth in the non-oil sector.

“The consistent positive performance recorded was driven largely by the positive growth in the non-oil sector, particularly in the services and agricultural sub-sectors, complemented by continued policy support by the Bank,” the CBN said.

According to the data from the NBS, the Real Gross Domestic Product, GDP, grew by 3.54 per cent (year-on-year) in the second quarter of 2022 and 5.01 per cent in the corresponding period of 2021.

Meanwhile, the apex bank expressed concern at the persisting uptick in inflation for the ninth consecutive month with headline inflation (year-on-year) rising to 21.09 per cent in October from 20.77 per cent in September, causing an increase of 0.32 percentage point.

The CBN traced the inflationary trend to the persisting uptrend in energy prices and the prolonged period of scarcity of petrol, which have contributed to a sharp rise in transportation, logistics and manufacturing costs, which fed through to consumer prices.

It added that other contributory factors include the protracted insecurity across the country; perennial flooding in major food producing states; critical deficit of infrastructure in the country and poor road networks amongst others.

It is pertinent to note that although inflation still persists, its uptrend is at a decelerating rate.

The MPC noted that “inflation has continued an uptrend, even though at a decelerating rate, despite its last three consecutive sizable policy rate hikes.”

The committee therefore decided to continue to tighten the Monetary Policy Rate, MPR, but at a lower rate. Thus, it raised the MPR to 16.5 per cent.