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Inflation’ll remain at single-digit in 2014 – CBN

By on September 21, 2013

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, on Thursday said the inflation rate would continue to be in the single-digit band till the end of this year and throughout next year.

He also said although the growth rate of the economy had been at over six per cent in the last 10 years, it would likely increase to about 7.6 per cent in 2014.

Sanusi, who spoke at the ‘Euromoney Nigeria Banking and Capital Markets Conference’ in Lagos, noted that in spite of the slow recovery in global growth, the future of the country’s economy remained positive and encouraging.

The governor, who was represented by the Deputy Governor, Financial System Stability, CBN, Dr. Kingsley Moghalu, said, “Nigeria clearly has the competitive edge in the international capital market. First, the economic growth is robust. The economy grew on average above six per cent in the last decade and is projected to grow by 7.6 per cent in 2014.

“The stance of the monetary policy of the CBN has significantly reined in inflationary pressures, bringing it to 8.7 per cent in July 2013. It is projected that the rate of inflation will be within the single-digit band through to 2014. The exercise of fiscal prudence and consolidation on the part of the government has yielded salutary results as fiscal deficit had remained below 3.0 per cent of gross domestic product as of 2012. This is not expected to change in 2014.”

According to Sanusi, the continuous implementation of banking reforms has not only strengthened the bank’s financial intermediation process, but has also resulted in improved interventions in relevant and critical sectors of the economy.

He noted the Deposit Money Banks had become safer and more sound a result of the activities of the Asset Management Corporation of Nigeria and other reforms.

The banks, in collaboration with other stakeholders, will continue to ensure that the recent gains are preserved and built upon, he said.

The CBN boss said, “The prospect for growth in the economy going forward is high, the country will compete efficiently for capital as a result. Total investment has increased from 22 per cent to 23.6 per cent in 2013.

“Nigeria’s external reserves have improved form $42.4bn in December 2012 to $46.9bn in August 2013, which should increase confidence in Nigeria.”

Sanusi added that better prudence meant the government would be able to keep the country’s fiscal deficit below three per cent in 2014, as it had so far this year.

He said, “There is also the opportunity for higher returns on investments on account of the interest rate differential between the country and most developed countries; there is evidence that Nigeria is a preferred investment destination; total investment as a percentage of GDP was 22 per cent in 2012 and is projected to increase by 23.6 per cent in 2013.

“Nigeria may be behind in the adoption of electronic payment systems but will advance quickly over the next few years.”

Sanusi also said the creation of the Sovereign Wealth Fund would help in providing critical socio-economic infrastructure that was expected to stimulate massive and complementary private sector investment for economic growth, competitiveness and development.

The Director, Euromoney Conferences, Mr. Christopher Garnett, said, “Power privatisation is the biggest potential contributor to prosperity and growth. Dangote’s syndicated loan is a strong signal of financial market health in Nigeria.”

 

 

 

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