Dr. ‘Biodun Adedipe, Chief Executive of B. Adedipe Associates Limited, predicts that Nigeria’s inflation rate will remain below 20% by the end of the year, despite price pressures and other headwinds.
He made the prediction at the mid-year economic outlook review, a joint think-tank event hosted by the consulting firm and the Chartered Institute of Bankers of Nigeria (CIBN).
Constraints about rapidly rising prices have taken a new turn in recent months, with the consumer price index (CPI) reaching 18.6 percent in June. Domestic inflation, which predates the recent global crisis, has now caught up with the general trend.
Adedipe acknowledges that there are enormous local and international challenges, the majority of which are positively correlated, but he is confident that the country will end the year with an inflation rate of less than 20%.
He also expects the monetary authority to maintain its aggressive liquidity tightening and devalue the naira as a result of the price pressure. Its forecast came just before the local currency broke through the N700/$ resistance level last week.
“The cost of doing business will offset the positive impact of infrastructure improvement.” “With increased digitalisation and the ascendancy of the digital economy, Nigerian tech-savvy youth are becoming more appealing offshore,” Adedipe observes.
Money market rates, according to his presentation, will remain low, keeping domestic investors in the stock market while foreign investors “are likely to remain cautious until COVID-19 and Ukrainian war concerns subside.”
He sees a silver lining in the country’s fintech startups, which he believes will continue to attract attention from investors all over the world. He believes the country has enormous potential in the fintech ecosystem.