The Central Bank of Nigeria (CBN) has underscored that the nation’s inflation rate stands as a positive outlier compared to many African countries.
The revelation came from the Acting Governor of the CBN, Folashodun Shonubi, during his address on Tuesday at the highly anticipated 2023 Zenith Bank International Trade Seminar.
Represented by Kingsley Obiorah, the Deputy Governor of Economic Policy at the CBN, Shonubi elaborated on the multifaceted factors contributing to the global surge in inflation. The seminar, themed ‘Nigerian Non-Oil Export Industry: The Present, The Future,’ took place at the prestigious Civic Centre on Victoria Island, Lagos.
Obiorah, while discussing the theme, lamented the relatively sluggish growth rate of Nigeria’s non-oil exports in relation to the Gross Domestic Product (GDP) ratio. He highlighted that Nigeria’s current inflation rate rests at 22.8%, juxtaposing it with some of its continental counterparts. Notably, neighboring Ghana struggles with a staggering 42.5% inflation, Ethiopia faces 31%, and Egypt contends with 36%.
“While Nigeria’s inflation rate may be at 22.8%, these comparative figures highlight that our country is performing relatively well. However, these conditions have not remained without impact on economic growth,” Obiorah commented. He further expounded that the International Monetary Fund (IMF) had revised its growth projections for Nigeria downwards to 3.2% for 2023.
Continuing his analysis, Obiorah emphasized the external factors influencing global inflation trends. He noted that the ongoing conflict between Russia and Ukraine, coupled with a shift in consumer preferences from goods to services, played a significant role in this trajectory.
“The conflict between Russia and Ukraine has substantial repercussions, as these nations collectively contribute 30% of the world’s sunflower exports. Such disruptions to key commodities invariably lead to global food price increases,” Obiorah explained.
He also highlighted China’s internal turmoil, driven by the dual forces of a ‘zero COVID policy’ and a transition to renewable energy sources.
Obiorah detailed how China’s property market correction, coupled with a shift in investment patterns, had triggered disruptions in the supply chain. “China’s property market correction has resulted in an oversupply of vacant properties, around 65 million empty apartments, equivalent to the entire population of France,” he noted. These challenges have contributed to disturbances in the global supply chain dynamics.
Furthermore, the economic expert lamented Nigeria’s low growth in non-oil exports to GDP ratio, signaling a need for swift progress in this sector. He compared Nigeria’s performance to nations with significantly smaller land areas, like the Netherlands and Ireland.
Despite their diminutive sizes, these countries have achieved remarkable growth in non-oil exports, with the Netherlands witnessing non-oil exports equivalent to 29% of its GDP.
Obiorah concluded his presentation by urging Nigeria to expedite its efforts to bolster non-oil exports and GDP growth. He emphasized the imperative for Nigeria to harness its potential and align with global economic trends for sustainable growth.
As the CBN’s insights shed light on Nigeria’s inflation landscape and its broader economic implications, stakeholders and experts at the seminar were left with a more comprehensive understanding of the nation’s economic dynamics in a global context that sits on just about 70,000 square kilometers, and they routinely do non-oil exports of $170 billion so we can do better.”
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