Nigeria’s Inflation Performance Stands Stronger Compared to Regional Counterparts

The Central Bank of Nigeria (CBN) has underscored the country’s relatively favourable inflation rate, positioning it comparatively better than many African nations.

Speaking at the 2023 Zenith Bank International Trade Seminar, the acting Governor of the CBN, Folashodun Shonubi, represented by Deputy Governor Kingsley Obiorah, highlighted various contributing factors to the global inflation trends.

The seminar, titled ‘Nigerian Non-Oil Export Industry: The Present, The Future,’ provided a platform for discussing the challenges and prospects of Nigeria’s export landscape.

Obiorah lamented the low growth rate of non-oil exports in relation to Gross Domestic Product (GDP), a concern that underscores the need for strategic reforms in the export sector.

Obiorah revealed that Nigeria’s current inflation rate stands at 22.8%, indicating that the country’s inflation performance is more favorable when compared to its African counterparts. Notable examples include Ghana with an inflation rate of 42.5%, Ethiopia at 31%, and Egypt at 36%. This data, according to Obiorah, showcases that Nigeria’s inflation challenges, though significant, are not as dire as those experienced by other nations.

The International Monetary Fund (IMF) has projected a growth moderation of 3.2% for Nigeria in 2023. While the global inflation trend has been influenced by multiple factors, including geopolitical conflicts and shifts in demand patterns from goods to services, Obiorah emphasized that Nigeria’s relative stability in inflation rates is commendable.

Obiorah further addressed the challenges posed by the war between Russia and Ukraine, highlighting their roles as major commodity exporters and the resulting impact on food prices globally. The shift from coal to renewable energy in China and disruptions in the Chinese property market also contribute to the complex inflation landscape.

The Deputy Governor also highlighted the need for Nigeria to enhance its non-oil exports as a driver of economic growth. Comparing the non-oil exports to GDP ratio, he stressed the importance of increasing this ratio to stimulate economic diversification and prosperity.

Comparative examples were drawn from smaller countries such as the Netherlands and Ireland, both of which demonstrate a higher non-oil exports to GDP ratio. Despite their smaller land sizes, these countries excel in exporting goods, showcasing the potential for growth in Nigeria’s export sector.

As the nation continues its efforts to navigate economic challenges and stimulate growth, the CBN’s insights highlight the need for strategic reforms to enhance non-oil exports, capitalize on favorable inflation rates, and foster sustainable economic development.