Nigeria’s Inflation Expected to Decline by the End of 2024, Says Norrenberger Report
In a detailed economic forecast, Norrenberger, a leading financial services group, has predicted a downturn in Nigeria’s inflation rates by the conclusion of 2024. This comes as a positive sign amidst concerted efforts by both the monetary and fiscal authorities of the country to battle the enduring inflationary pressures.
The forecast is a key highlight of the Norrenberger Economic Outlook (NEO) titled “Nigeria: Beyond the Reforms”. The insightful report, launched through a virtual event on Thursday, outlines both the current economic challenges and the potential pathways leading towards sustainable growth and stabilization.
During the presentation, Pabina Yinkere, the Business Head at Norrenberger Assets Management, pointed out the significant concerns regarding inflation which has been a persistent issue for Nigeria. Yinkere elaborated, “Inflation has been chiefly fueled by a series of global and local events including the COVID-19 pandemic, the ongoing Russia-Ukraine conflict, an infrastructure deficit, heightened energy costs, the disparity in purchasing power, and the recent removal of fuel subsidy.”
Despite these challenges, the report brings optimism by forecasting a deceleration in inflation to 32.26% by year-end, alongside a moderate Gross Domestic Product (GDP) growth of 3.1%.
The report further discusses the future of the exchange rate in Nigeria, suggesting a variance in forecasts ranging from a worst-case scenario of N2,000 to $1 to a best-case scenario of N1,100 to $1. The variance in these predictions hinges on several crucial factors. A worst-case scenario could emerge from increased global tensions, additional rises in electricity tariffs, a drop in crude oil production below 1.2 million barrels per day (mbpd), and dovish policies from the Central Bank of Nigeria (CBN). On the flip side, surpassing oil production targets of 1.5mbpd and the full operationalization of the Dangote Refinery, which is expected to enhance supply and boost economic activities, could lead to a more favorable outcome.
It was additionally emphasized in the report that sectors which heavily contribute to the country’s economy were significantly impacted due to the volatility in exchange rates and the hikes in interest rate. These sectors’ instability underscores the need for sustainable and well-thought-out economic reforms.
In conjunction with the economic forecast, Norrenberger also facilitated a panel discussion featuring a lineup of seasoned financial experts. This session was aimed at deliberating on the highlighted economic challenges and to foster a comprehensive dialogue on feasible recommendations for Nigeria’s economic growth and development. The collective insights further enriched the discourse on navigating through the complexity of reforms and challenges confronting the country’s economic landscape.
As Nigeria grapples with these economic challenges, the NEO report by Norrenberger shines a light on the crucial pathways and interventions needed to stabilize the economy. It underscores the importance of strategic reforms and the agile intervention of monetary and fiscal policies to mitigate inflation and bolster economic growth. With a cautiously optimistic outlook for the end of 2024, stakeholders within the Nigerian economy may have a framework within which to navigate the turbulent times ahead.
