Mr Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN), stated on Friday that the steady rise in headline inflation from 15.60% in January to 20.77% in September was consistent with global trends.
Emefiele made the remarks at the 57th Annual Bankers Dinner, held on Friday in Lagos by the Chartered Institute of Bankers Nigeria (CIBN).
The dinner’s theme, “Radical Responses to Abnormal Episodes: Time for Innovative Decision-making,” was timely and appropriate.
He also stated that headline inflation rose to 20.77 per cent in September, indicating an eight-month uptick. The upward momentum came after a period of decline in 2021 due to balanced monetary policy actions.
According to him, upside pressure on consumer inflation resurfaced this year as global conditions exacerbated existing local imbalances, undermining price stability.
“Food remains the major component of domestic consumer price basket. The annualised uptick in headline inflation mirrors the 6.21 percentage points upsurge in food inflation to 23.34 per cent in September.
“In addition to harsh global spill overs, exchange rate adjustments and imported inflation; inflation was also driven by local factors such as farmer herder clashes in parts of the food belt region,” he said.
According to Emefiele, the world economy experienced the most significant downturn since the Great Depression in early 2020, following the unexpected outbreak of the COVID-19 pandemic.
According to him, the effect will reduce global GDP by about 3.1% in 2020, and commodity prices will be volatile as the price of crude oil falls by more than 70%.
The CBN governor also claimed that as the world struggled to return to pre-pandemic levels, the global economy was hit yet again by the outbreak of the Russian-Ukraine war.
“The subsequent strengthening of the US dollar further aggravated inflationary pressures, along with a weakening of currencies, and depletion of external reserves in many emerging market countries.
“Today close to 80 per cent of countries have reported heightened inflationary pressures due to a confluence of some of the factors mentioned above,” said Emefiele.
“In fact, the short-term global growth projections by the IMF have been downgraded three times in 2022 and is likely to be below the 3.2 per cent and 2.7 per cent estimates for 2022 and 2023, respectively.
“Average growth among advanced economies is projected to plunge from 5.2 per cent in 2021 to 2.4 per cent in 2022 and 1.1 per cent in 2023.“Estimated output growth in emerging markets, is expected to slow from 6.6 per cent in 2021 to 3.7 per cent apiece in 2022 and 2023,” he said.
The leader of the central bank also pointed out that, in light of many countries’ food, energy, and cost-of-living crises, there were growing restrictions on food exports from many countries.
“As at the last count, about 23 countries, mainly in advanced economies, according to the World Bank have banned the export of 33 food items. Seven other countries have additionally implemented various measures to limit food exports,” Emefiele said.