Says naira devaluation has brought in foreign investment
The Central Bank of Nigeria (CBN) Governor,Olayemi Cardoso says the apex bank is prepared to deploy “all tools at our disposal” to control surging inflation.
Speaking at the FT Africa Summit in London, Cardoso addressed mounting inflationary pressures after the annual inflation rate rose to 32.70% in September, up for the first time in three months.
This spike, driven by increased food and energy costs, was fueled in part by the government’s removal of subsidies on petrol and electricity and successive naira devaluations since President Bola Tinubu assumed office last year.
While expressing cautious optimism that headline inflation may ease in the coming months, Cardoso acknowledged that food inflation remains “stickier” and continues to pose a challenge.
However, he emphasized ongoing coordination with the government to counter persistent price pressures.
Cardoso noted Nigeria’s accelerating reform agenda as a magnet for foreign investment, citing recent high-profile visits from Citigroup CEO Jane Fraser and JPMorgan’s Jamie Dimon.
“There’s an enormous amount of interest now,” he said, noting that the naira’s relative stabilization has enhanced the economy’s competitiveness.
Since Tinubu took office, the naira has lost approximately 75% of its value, while fuel prices have quintupled, a strain on households yet a draw for foreign investors eyeing competitive valuations.
The CBN governor underscored the impact of recent policies aimed at restoring investor confidence.
He noted significant improvements in foreign exchange access compared to prior challenges, with fewer complaints about forex availability: “Now, the market is a lot deeper, and it [forex] is available,” Cardoso said.
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Nigeria’s gross foreign exchange reserves have climbed above $40 billion, and the CBN plans to publish net reserve figures by early 2025 to enhance transparency.
Looking ahead, Cardoso projected moderate economic growth, aligning with World Bank estimates of a 3.6% GDP growth rate for 2025, slightly up from the anticipated 3.3% growth this year.
“The reforms we’re enacting now place Nigeria in a far stronger position for future growth,” he stated, underscoring the administration’s commitment to stability and economic competitiveness.
Global Financial Digest