Economists back CBN, say inflation will moderate to 21.4% in 2024

SOME economists have said that the Central Bank of Nigeria (CBN) 21.4 per cent inflation moderation projected for 2024 is achievable.

The economists, like the CBN, hinged their projection on the resumption of operations of the Dangote Refinery and the Nigerian state-owned Portharcourt Refinery.

The CBN Governor, Yemi Cardoso, who gave the apex bank’s stance at the 2024 macroeconomic outlook of the Nigerian Economic Summit Group (NESG) on Wednesday, January 24, in Lagos, said the public and private refineries becoming functional would help to moderate Nigeria’s inflation to 21.4 per cent this year.

“The anticipated moderation in pump prices of PMS is due to the expected operational status of the country’s government and private-owned refineries in 2024, which is a pivotal factor in the economic equation of moderating inflation.

According to the CBN governor, the economic stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience.

“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent, “he said.

He added, “This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.”

He also informed that the apex bank would adopt an inflation-targeting framework for monetary policy instruments and collaborate with fiscal authorities to achieve price stability and positively influence consumer behaviour.

He assured that declining inflation would greatly impact businesses, provide a more predictable cost environment and potentially lead to lower policy rates, stimulating investment, growth, and creating job opportunities.

For the chief executive officer of Financial Derivatives Limited, Bismarck Rewane, the resumption of the Dangote refinery and the Port Harcourt refinery will guarantee supply and moderate energy prices, a key inflation trigger.

“Prices are made up of costs and the margin. One clear thing is guaranteed supply and price moderation. Because energy prices lead to inflationary pressures, the guaranteed supply would help to moderate inflation,” he said.

    “This is a major milestone for Nigeria and the West African market. 650,000 barrels per day. This would address our concerns of energy security and satisfy our local consumption markets, “he added.

    In a similar submission, an investment banker and an economist, Oyinkasola Aregbesola, gave reasons why the inflation would moderate below 24 per cent.

    “There is going to be a rebound in the oil sector and an increase in oil production for the sector. The government’s efforts to curb oil theft would also help in moderating energy prices which is a main trigger for food inflation.

    She noted that these developments would also help to moderate inflation, while projected growth in the non-oil sector would help to moderate inflation rise.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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