Nigeria is expected to be out of recession by the first quarter of 2021, says Central Bank of Nigeria..
This was disclosed by CBN’s Governor, Godwin Emefiele, on Friday while addressing the banking community at the ’55th Annual Bankers Dinner’ organised by the Chartered Institute of Bankers of Nigeria.
Optimistic of the projection, Emefiele revealed that the growth in 2021 would attain 2.0 per cent.
The country had recently slid into recession when its headline inflation rose to 14.23 per cent year-on-year in October 2020.
“In addition to the disruption to global and domestic supply chains as a result of COVID-19, inflation was exacerbated by the increase in value-added tax rate, petroleum prices, electricity price adjustments, farmer-herder clashes, exchange rate adjustment, and flooding that occurred in many parts of our farm belt areas.
“Inflation in October 2020 stood at 14.2 percent. We, however, expect inflation to begin to moderate by the first half of 2021 as efforts are being made to enable significant cultivation and production of key staple items in the dry season,” Emefiele said.
According to him, downside risks remain, as restoration of full economic activities, particularly in service related sectors, remains uncertain until COVID-19 vaccine is produced and made available to millions of people across the world.
He added, “We must therefore find ways to insulate our economy from the impact of these shocks through our diversification efforts, while also working to ensure that we adhere to safety protocols in order to prevent a surge in COVID-19-related cases, as this could further cripple economic activities.
“Our actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee meeting of November 23 and 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.
“Given the fact that the rise in inflation is not due to monetary factors but rather the prevalence of structural rigidities and supply shocks, traditional tools of monetary policy may not be helpful in addressing current inflationary pressures. Rather, a more useful policy will be the supply-side measures implemented by the bank.”
