Nigeria’s inflation may drop to below 15% in 2023 – Emefiele

Govenor of the Central Bank of Nigeria, Godwin Emefiele, has said the bank is targeting a drop in the country’s inflation rate to less than 15 per cent by end of 2023.

Emefiele said this at the 57th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria in Lagos at the weekend.

He said for the rest of 2022 and towards mid-2023, Nigeria’s rate of inflation is projected to remain elevated and above the 12.5% growth-aiding threshold.

“However, on the backdrop of our previous policy measures, and as the effect continues to permeate the system, our inhouse model-based simulations indicate that inflation rate could fall steadily to less than 15 per cent by end-2023,” Emefiele said.

The CBN governor said with the cumulative hike of the Monetary Policy Rate by 500 basis points in 2022 by the bank’s Monetary Policy Committee, he is confident of an ensuing period of sustained disinflation

While noting that Nigeria’s headline inflation, which rose from 15.60% in January to 21.09% in October, was consistent with global trends, Emefiele said Nigeria is not the worst hit as Turkey and Argentina had hyperinflation above 80% while Ghana and Ethiopia also had rates above 30%.

He said the Russia/Ukraine war, along with the sanctions placed on Russia by the US and its allies, led to a spike in crude oil prices.

He said it was unfortunate that while global developments steadily drove crude oil prices upwards in 2022, Nigeria’s oil sector performance has been abysmal and domestic crude oil production plunged from over 1.9 million barrels per day in April 2020 to 1.1 million bpd in September 2022.