New Telegraph

December 8, 2023

Emefiele reiterates optimism about economy amid slow growth

In his address at the 57th Chartered Institute of Bankers of Nigeria’s annual bankers’ dinner, which held in Lagos last Friday, Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, painted a positive outlook for the country’s economy despite Gross Domestic Product (GDP) growth slowing to 2.25 per cent in Q3’ 2022, writes Tony Chukwunyem

As is customary, the annual bankers’ dinner organised annually, usually in the last week of November, by the Chartered Institute of Bankers of Nigeria (CIBN) for the banking and finance industry, provides a platform for whoever is occupying the office of Governor of the Central Bank of Nigeria (CBN) to speak on economic and financial market developments over the past year and also provide the economic outlook for the new year. Thus, in his address at this year’s edition of the event, which held in Lagos, last Friday, the CBN Governor, Mr. Godwin Emefiele, did not fail to disclose the apex bank’s outlook for the economy in 2023.

However, the CBN Governor began his speech by noting that though effective fiscal and monetary policies helped the global and especially the Nigerian economy to rebound swiftly from the Covid-19-induced downturn of 2020, “the swift rebound is now being constrained by the significant supply disruptions in key producing nations like China, as factories now struggle to meet the upsurge in global demand, along with other bottlenecks such as inadequate ships and containers to convey goods, (which)has resulted in a hike in freight rates from key producing nations like China and ultimately an uptick in imported inflation.”

He further noted that while the global economy was still trying to recover from the effects of the Covid-19 crisis, it was again hit by Russia’s invasion of Ukraine and its attendant crises, including surging inflation. Continuing, Emefiele said: “In their attempt to contain the rising inflation, advanced markets such as the US, began to increase their policy rates, which led to a tightening of global financial market conditions along with a significant outflow of funds from emerging markets countries.

“The subsequent strengthening of the US dollar further aggravated inflationary pressures, along with a weakening of currencies, and depletion of external reserves in many emerging market countries. “Central Banks in emerging markets and developing economies in a bid to contain rising inflation were also compelled to raise rates, which is expected to lead to a tapering of global growth over the next year. “In fact, the short-term global growth projections by the IMF have been downgraded three times in 2022 and is likely to be below the 3.2 percent and 2.7 percent estimates for 2022 and 2023, respectively.

“Average growth among advanced economies is projected to plunge from 5.2 percent in 2021 to 2.4 percent in 2022 and 1.1 percent in 2023. Estimated output growth in emerging markets, is expected to slow from 6.6 percent in 2021 to 3.7 percent apiece in 2022 and 2023.”


Interestingly, on the eve of the CIBN’s annual bankers’ dinner, the National Bureau of Statistics (NBS) had released data showing that Nigeria’s Gross Domestic Product (GDP) grew by 2.25 per cent (year-on-year) in real terms in the third quarter of 2022 (Q3’22), representing a 1.78 per cent decline compared to the 4.03 per cent growth recorded in Q3’21. The data also indicated that growth decreased by 1.29 per cent when compared to the 3.54 per cent growth rate recorded in the preceding quarter. Analysts pointed out that though the advancement by 2.25per cent marks the eight-consecutive quarter of GDP growth, it was the slowest pace of expansion since Q1’21. They attributed the deceleration to the base effects of the 2020 recession as well as the slow pace of economic activities occasioned by challenging economic conditions.


However, while he acknowledged in his speech that the Nigerian economy was not insulated from external shocks, the CBN Governor stressed that the economy has remained resilient as a result of some of the actions taken by the country’s fiscal and monetary authorities. According to him, “following the brief recession in Q2 of 2020, the Nigerian economy has recorded eight consecutive quarters of positive output with domestic growth rates improving from negative 1.92 per cent in 2020 to 3.40 percent in 2021 and further to 3.54 per cent as at Q2’22.

“This performance reflected the sustained buoyancy of the domestic non-oil sector, which continued to record growth since Q4’20, recovering from negative 1.25 per cent in 2020 to 4.77 per cent in Q2’22. Performance of the non-oil sector reflects the impact of policy supports to household, MSMEs and other high- impact economic sectors through various CBN interventions. “Specifically, we have seen a strengthening of the agriculture and services sectors which have continued to propel domestic growth rate throughout this period while the oil sector has continued to flounder with growth rate plunging to negative 11.77 percent in Q2’22.”

Indeed, he stated that “the agriculture sector remained the critical factor behind the continuing resilience of the domestic economy. This is an affirmation of the success of the CBN’s development finance initiatives in the nonoil sector, particularly in the agriculture sector, which has helped to boost domestic output and create jobs locally.” Giving a breakdown of some of the apex bank’s activities in the agriculture sector Emefiele disclosed that “between July and August 2022, under the Anchor Borrowers’ Programme (ABP), the Bank disbursed N54.82 billion to several agricultural projects, bringing the cumulative disbursements under the Programme to N1.026.27 trillion to over 4.6 million smallholder farmers cultivating 21 different commodities across the country.

“The Bank also released N0.70 billion to finance large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS), bringing the total disbursements under the Scheme to N745.02 billion for 679 projects in agro-production and agro-processing.” He also stated that the CBN released the sum of N66.99 billion under the N1.0 trillion Real Sector Facility to 12 additional projects in manufacturing and agriculture, adding that under the 100 for 100 Policy on Production and Productivity (PPP), the apex bank has disbursed the sum of N20.17 billion to 14 projects in healthcare, manufacturing, and services.


Unveiling the CBN’s outlook and policy thrust for 2023, Emefiele noted that while the IMF projects that more than a third of the global economies will suffer a recession within the next two years, especially as the US, EU and Chinese economies stagnate, “the CBN is of the view that the short-term outlook of the Nigerian economy remains good.” According to him, “based on the expectation of a robust nonoil performance, and barring any unforeseen shocks, GDP growth rate is projected to remain positive in the remaining quarter of 2022 and during 2023.

“The performance of the nonoil sector will be buoyed by the continued efforts at entrenching indigenous productivity in highimpact real sector activities, especially agriculture, MSMEs, and manufacturing. Domestic aggregate demand is further expected to be bolstered by the anticipated budgetary outlay and the surge of electioneering spending in the next few months.

From 3.54 per cent in quarter two of 2022, growth is projected to reach 3.7 per cent in quarter three and 3.47 by the fourth quarter.” On inflation, he said: “Inflation expectations are rising as existing structural rigidities, are compounded by global factors and anticipated elections related liquidity upsurge. For the rest of 2022 and towards mid-2023 Nigeria’s rate of inflation is projected to remain elevated and above the 12.5 per cent growth-aiding threshold. “However, on the backdrop of our previous policy measures, and as the effect continue to permeate the system, our inhouse modelbased simulations indicate that inflation rate could fall steadily to less than 15 percent by end-2023.” Similarly, on the country’s Balance Of Payments (BOP) for 2023, he said: “Overall our balance of payments is expected to remain positive in the short-term.

We have seen a recent boost in non-oil exports receipts to about $2.5 billion. “Hoping that the poor performance of the oil sector reverses, especially as high crude prices is sustained by a potential elongation of the Russian-Ukraine war, we expect the Current Account Balance to strengthen even further. This will be backed by our resolute effort to strengthen and improve real non-oil sector productivity through apt diversification to reduce undue imports.” He also emphasised the need for the country to have a resilient economy that would be able to withstand external shocks.

“Given the global and domestic headwinds we face as a nation, and the volatility in the global environment, we have no other option, as leaders interested in the progress of our nation, but to work very hard to spur job creation by reviving agricultural and industrial activities in the country.

“Like I have said many times before, if we continue to support the growth of small holder farmers, you can only imagine the amount of wealth and jobs that will be created in the country. If we turn a blind eye to the opportunities provided by our enormous human and material resources, this could spell doom for our nation,” the CBN Governor said.


Analysts believe that the huge effort that the CBN, under Emefiele’s leadership, is putting into boosting the real sector, should fuel optimism among Nigerians about the country’s economic prospects.

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