Economy
By Anthony Isibor
THE Central Bank of Nigeria, CBN, says that Nigeria’s external reserve stood at US$39.07 billion as at 19th September 2024, representing an increase of 17.4 per cent compared with US$33.28 billion in the corresponding period of 2023.
According to the communique signed by the Governor of the CBN, Olayemi Cardoso, the figure represents 8 months of import cover for goods and services and 13 months of imports of goods only.
The communique, which was released at the end of the two-day Monetary Policy Committee meeting held on 23rd and 24th September 2024 stated that Real GDP (year-on-year) grew by 3.19 per cent in the second quarter of 2024, compared with 2.98 per cent in the first quarter and driven by both the oil and non-oil sectors.
It explained that the Committee members also assessed the performance of key financial soundness indicators and noted with satisfaction that despite familiar headwinds, the banking industry remains safe, sound, and stable.
The Committee, however, emphasized the need to sustain supervisory oversight on the industry to strengthen its continued support to the economy.
It also stated that global growth projection by the IMF remains at 3.2 per cent in 2024 and 3.3 per cent in 2025. Some of the downside risks to this projection remain geo-economic fragmentation, elevated global debt and ongoing geopolitical tensions between Russia and Ukraine as well as Israel and neighboring countries.
On food inflation, the committee noted that the upside risks remained flooding, hike in energy prices, scarcity of petrol and most importantly, insecurity in farming communities and commended the efforts of the federal government in addressing insecurity in farming communities, especially considering the weight of food in the CPI basket.
Following these considerations, Members deliberated on the optimal policy option to sustain the downward trend in price development, contain emerging risks to inflation, stabilize the exchange rate and safeguard the banking system while also shielding the recovery of output growth.
In addition, Members noted that the real policy rate remains negative even after the recent moderation in headline inflation, thus, to attract investments into the economy, efforts must be sustained to achieve a positive real interest rate.
It noted that as key central banks commence monetary easing, global financial conditions are expected to ease gradually and hopefully offset the downside risks to the recovery of global growth. Global inflation is expected to continue its deceleration in 2024, but may remain above the long-run targets of most central banks in the advanced economies.
In addition, the MPC applauded the ongoing effort of the federal government to bridge the food supply deficit through the duty-free import window for food commodities.
“The Committee also expressed optimism that the lifting of refined petroleum products from Dangote Refinery will moderate transportation costs and significantly support the easing of food price pressures in the short to medium term.
This is also expected to moderate foreign exchange demand for importation of refined petroleum products, with a positive spillover on external reserve and improvement in the overall balance of payment position,” it said.
Realnews reports that the National Bureau of Statistics, headline inflation moderated to 32.15 per cent in August 2024 from 33.40 per cent in July, driven by a decline in food inflation, while the core component inched up.
Food inflation also eased to 37.52 per cent in August 2024, compared with 39.53 per cent in July, while core inflation rose marginally to 27.58 per cent in August 2024, compared with 27.47 per cent in July, while Month-on-month, headline inflation fell to 2.22 per cent in August 2024 from 2.28 per cent in the preceding month, while food inflation eased to 2.37 per cent in August 2024, compared with 2.47 per cent in July.
Core inflation, however, rose marginally to 2.27 per cent in August 2024, compared with 2.16 per cent in July.
A.I
Sept. 25, 2024
Tags: Anthony Isibor CBN Olayemi Cardoso
