Inflation: Nigeria not as bad as other African countries — CBN

The Central Bank of Nigeria (CBN) has said the country’s inflation rate is better when compared to most African nations.

The acting Governor of the CBN, Folashodun Shonubi, stated this on Tuesday at the 2023 Zenith Bank International Trade Seminar.

Shonubi, who was represented by the Deputy Governor, Economic Policy at the CBN, Kingsley Obiorah, said there were several contributing factors to the global inflation rise.

Obiorah, while shedding light on the theme, ‘Nigerian Non-Oil Export Industry. The Present, The Future,’ held at the Civic Centre, Victoria Island, Lagos; lamented the low growth rate in non-oil exports to Gross Domestic Product ratio.

Obiorah said Nigeria’s inflation rate stood at 22.8 per cent, adding that the International Monetary Fund expected the country to have a growth moderation of 3.2 per cent in 2023.

“Now, when you come down to Africa and neighbouring Ghana, At the last count inflation there is at 42.5 per cent. We have it at 31 per cent in Ethiopia and 36 per cent in Egypt.

“So, in our dear country, we are at 22.8 per cent. When you hear these figures, it tells you that we’re not doing as badly but all of this has also affected economic growth itself. Today, the IMF has revised growth downwards from 3.5% per cent to three per cent this year and 3 per cent next year.”

He added, “For Sub-Saharan Africa, they expect growth to moderate from 4.1 per cent last year to 3.5 per cent this year, but to take back again to just slightly over 4 v next year. In Nigeria they expect us to do 3.2 per cent this year.”

Obiorah mentioned that the war between Russia and Ukraine, and a shift from goods to services are also significant factors.

“We know that the war between Russia and Ukraine is contributing a lot as the two countries are very important commodity exporters. Both of them account for 30 per cent of sunflower exports in the world. So, when such a region is at war, you know what will happen to food prices worldwide.

“We know too that there’s been a shift in demand from goods to services; services are usually more expensive. There’s also the disruption going on in China today with their zero COVID policy, power cuts as we know, and then the switch from coal to more renewable energy has also meant that power is not as valuable as it used to be,” he said.

The economic policy expert stated that the high rate of investment in property services in China has also led to disruptions in the supply chain.

“We see too in China today some correction in the property market. A lot of Chinese don’t have quite the kind of investment vehicles that say the average American has.

“A lot of them have put their savings into property. But that has meant an oversupply of property in China today. There are 65 million empty apartments in China.”