CHIEF Executive Officer of the Financial Derivatives Nigeria Company Bismarck Rewane has predicted a dip in Nigeria’s foreign reserves to $30 billion in 2022.
Rewane, who was the keynote speaker on Thursday at a webinar organised by First Bank Plc on Nigerian Economic Outlook for 2022, also predicted that the naira would be strengthened this new year.
He also projected a 13.3 per cent inflation rate for the nation. He said this while speaking at the Nigerian-British Chamber of Commerce (NBCC) January breakfast meeting.
He said inflation would increase before reducing as external reserves would go down to $30bn, noting that the exchange rate differential could drop and then converge and strengthen the naira.
“We would see airport concession. I left out Air Nigeria because it would start in 90 days. Dangote Refinery would be completed at the end of the year; 5G adoption, affordable housing, these things would happen.
“There are also sector opportunities in ICT. Airtel and MTN would spend over $2bn on telecom infrastructure due to MoMo and Smart Cash. Telephone penetration would increase, FinTech and mobile payment would increase.”
Nairametrics recently reported that Nigeria’s external reserve dipped $24.3 million in the first week of the year to close at $40.49bn by January 7, 2021, representing a 0.06 per cent, compared to $40.42bn recorded by the start of the week.
Rewane, reflecting on 2021, noted that the naira dropped by 20.43 per cent at the parallel market and 6.03 per cent at the official window. He noted that while the average oil price went up 63.88 per cent to $70.96 per barrel, average oil production went down from 12.5 per cent to 1.4 million barrels per day.
He added that the average Gross Domestic Product (GDP) in the nine months of 2021 was 3.18 per cent, compared to 2.62 per cent in the same period of 2020.
The economist added that Nigeria was still the country with the fourth highest unemployment rate in Africa at 33.3 per cent, with a misery index of 50.41 per cent. He stated that inflation had affected consumers’ purchasing power and 93.9 million people were still in the threshold of poverty.
Similarly, Chief Executive Officer (CEO) of RTC Advisory Services Limited Opeyemi Agbaje said Nigeria would not achieve growth in 2022 with inflation on the rise.
Agbaje said, “There is incoherence around monetary policies like interest and exchange rates. Everything is going in the wrong direction and I think the reason is that we have not focused on the fundamentals. If we can get growth and investment flowing in again and our policy environment stable, then inflation can come down.”
Rewane, supporting him, added, “We don’t want taxation, high unemployment and low output, that could be game over. We only have weeks, not months to get it right.”
Meanwhile, the immediate past Director-General of Lagos Chamber of Commerce and Industry (LCCI) Muda Yusuf predicted a growth rate of three per cent for the Nigerian economy in 2022.
The World Bank predicted a 2.5 per cent economic growth for Nigeria in 2022, and 2.8 per cent in 2023.
However, Rewane warned the government to cut down on its borrowings in order not to impoverish its citizens.