Inflation in the country will continue in 2018 and 2019 amidst election spending and currency adjustment. Managing Director, Financial Derivatives Company, FDC, Bismark Rewane, has said.
Speaking at the Stanbic IBTC Group’s West Africa Investors’ Conference 2018 in Lagos, Rewane, said that inflationary pressure will continue as the election gets closer. “Inflation is expected to average at 14.8 percent this year; it will likely be in the range between 14-16 percent,” he said. Speaking on the theme, ‘The pathway towards inclusive economic growth’, Rewane postulated that the focus by the Federal Government should be on infrastructure, power output, and job creation in 2018.
He, however, stated: “Only policies that are considered politically expedient will take the forefront, hence little or no difference in policy changes would be expected. In fact, policy and economy will be driven by political considerations. The economy is performing sub-optimally as the Real Gross Domestic Product, GDP, growth rate at 0.8 percent lags growth in potential GDP of 1.9 percent. This is affected by indecision, self-interest and the crony capitalism in place.”
Rewane further stated that the country is still import dependent as the rate of import is still high and unemployment and underemployment at 40 percent in third quarter 2017 was not pleasing. “Misery index is increasing due to rising unemployment currently at 55.13 percent. The high-income inequality, with income per capita of $2000 and the high poverty rate of 69 percent is not good enough.”
On the outlook for the economy in 2018, he said: “There is potential for non-oil exports including agriculture and solid minerals but the difficult business environment will restrict their development.
“Nigeria’s oil output is expected to rebound as GDP is expected to grow at 2.2 percent, oil revenue at $44 billion and oil price of $60 – $65 per barrel. It is expected that exchange rate will be stable, the downside of 10 percent if certain things happen. The interest rate is expected to fall by an average of 200 bases points and money supply growth of 7.2 percent.”
