The Central Bank of Nigeria has said that despite the steady rise in inflation, the country is still doing better than most African countries.
The acting Governor of the CBN, Folashodun Shonubi, stated this on Tuesday at the 2023 Zenith Bank International Trade Seminar.
Citing inflation figures in countries like Ghana, Ethiopia, and Egypt, the CBN Governor said the situation in Nigeria is not as bad.
According to him, beyond Africa, several countries of the world are also currently battling with hyperinflation. He attributed this to the war between Russia and Ukraine, which he said has led to an astronomic rise in the prices of foods globally.
Global factors
Highlighting some of the factors pushing up inflation across the globe, Shonubi, who was represented at the event by the Deputy Governor, Economic Policy at the CBN, Kingsley Obiorah, said:
- “We know that the war between Russia and Ukraine is contributing a lot as the two countries are very important commodity exporters. Both of them account for 30% of sunflower exports in the world. So, when such a region is at war, you know what will happen to food prices worldwide.
- “We know too that there’s been a shift in demand from goods to services; services are usually more expensive. There’s also the disruption going on in China today with their zero COVID policy, power cuts as we know, and then the switch from coal to more renewable energy has also meant that power is not as valuable as it used to be.
- “We see too in China today some correction in the property market. A lot of Chinese don’t have quite the kind of investment vehicles that say the average American has.
- “A lot of them have put their savings into property. But that has meant an oversupply of property in China today. There are 65 million empty apartments in China.
- “That’s enough to take the entire population of France. So that correction is also leading to supply chain disruptions.”
Inflation figures across the world
He noted that all of these factors are exacerbating the high food prices globally. He cited an instance of Lebanon, where inflation is currently at 269%.
According to him, in Argentina, inflation is right now at 115% while in Turkey, it has risen to 38%.
- “Now when you come down to Africa and neighbouring Ghana, At the last count inflation there is at 42.5% We have it at 31% in Ethiopia and 36% in Egypt.
- “So, in our dear country, we are at 22.8%. When you hear these figures, it tells you that we’re not doing as badly but all of this has also affected economic growth itself. Today, the IMF has revised growth downwards from 3.5% to 3% this year and 3% next year.
- “For Sub-Saharan Africa, they expect growth to moderate from 4.1% last year to 3.5% this year, but to take back again to just slightly over 4% next year. In Nigeria they expect us to do 3.2% this year,” he said.
Focus on non-oil export
Speaking on the theme of the seminar, ‘Nigerian Non-Oil Export Industry.
The Present, The Future’ the CBN Governor thanked Zenith Bank for its continuing its tradition of calling attention to non-oil export. While noting that Nigeria needs to grow its non-oil exports to GDP ratio faster, he said:
- “In the decade between 2001 and 2011, the non-oil exports to GDP ratio for Nigeria was 0.8%. And you can imagine that in the next decade, so, from 2012 to 2022, we were still at 1.2%. We need to be growing much faster. Countries that are way smaller than us are doing much better.
- “The Netherlands has a land size of 34,000 square kilometres.
- “So, if you add water, you go to 42,000. It might interest you to know that non-oil exports from the Netherlands is 29% of their GDP. Most times they do $108 billion in non-oil exports.
- “Now keep in mind the Netherlands is smaller than Niger State, actually the size of Niger State. I’ll give you another example. Ireland is a country that sits on just about 70,000 square kilometres, and they routinely do non-oil exports of $170 billion so we can do better.”
