The Central Bank of Nigeria (CBN) on Friday night, projected the economy to grow by 1.7 percent in the third quarter of 2018 and by 1.9 percent in the fourth quarter of the same year. Growth is currently put at 1.5 percent since quarter two of 2018.
Godwin Emefiele, governor of CBN who disclosed this in Lagos at the bankers dinner organised by the Chartered Institute Bankers of Nigeria (CIBN) expects the Gross Domestic Product (GDP) to pick-up in the remaining two quarters of 2018, buoyed by the anticipated budgetary and electioneering spending in the near-term.
Also, the CBN projects inflation rate to rise slightly to about 11.4 percent the rest of 2018 and towards mid-2019 and then moderate thereafter.
Emefiele said the monetary policy stance will remain judicious, research driven, adequate and supportive of the real economy subject to underlying fundamentals. According to him, the current tight stance is expected to continue in the near-term, especially in view of rising inflation expectations and exchange market pressures. “Though we will act to appropriately adjust the policy rate in line with unfolding conditions and outlooks, the CBN will continue to ensure that the policy interest rate is delicately set to balance the objectives of price stability with output stabilisation”, he said.
Though the CBN has so far managed to maintain exchange rate stability, the current capital flow reversals from emerging markets he said is expected to continue to exert considerable pressure on market rates.
This pressure he maintained could be amplified by the forthcoming elections, especially as the political market place heats up. Notwithstanding these pressures, Emefiele said the CBN is determined to maintain its stable exchange policy stance over the next few months given the relatively high level of reserves. Gross stability is projected in the FX market given increased oil related inflows and contained import bill.
“I will like to make it categorically clear that “sustaining a stable exchange rate is of overriding importance to us even as we continue to put measures in place to shore up reserves”.
Emefiele said the Bank will explore the possibility of leveraging technology to enhance credit to critical sectors of the economy, especially, agriculture and manufacturing.
“Our recently announced policy to refund portions of CRR to banks that are financing new projects (or expanding existing ones) in agriculture and manufacturing sectors will be intensified and enriched in the coming years. This, we believe, will bolster job creation while supporting our agenda to correct Nigeria’s imbalances and vulnerabilities”.
On 41 items, Emefiele said the CBN’s Economic intelligence and Banking Supervision Departments will work very hard with the EFCC to expose and sanction any, bank, company or Fx operator that colludes with unscrupulous individuals / companies to undermine the policy on 41 items. Such sanctions will include, but not limited to prohibiting the banks from maintaining any bank accounts for such institutions or persons in Nigeria.
