According to the Central Bank of Nigeria, the country’s inflation rate is lower than that of most African countries.
In a speech on Tuesday at the 2023 Zenith Bank International Trade Seminar, acting CBN Governor Folashodun Shonubi made this claim.
A number of factors, according to Shonubi, who was represented by Kingsley Obiorah, Deputy Governor for Economic Policy at the CBN, contributed to the rise in global inflation.
The theme of “Nigerian Non-Oil Export Industry” was discussed by Obiorah. The Present, The Future,” a conference held in Lagos at the Civic Centre on Victoria Island, bemoaned the low growth rate in the ratio of non-oil exports to GDP.
Nigeria’s inflation rate, according to Obiorah, is 22.8%, and the IMF anticipates a moderated growth rate of 3.2% in 2023 for the nation.
Inflation in Ghana, a neighboring country in Africa, was 42.5% as of the most recent count. Ethiopia has it at 31%, and Egypt has it at 36%.
“So we are at 22.8% in our dear country. Even though these numbers indicate that things aren’t as bad as they seem, the economic growth process itself has also been impacted by all of this. In today’s revision, the IMF reduced growth from 3.5% to 3% for this year and 3% for the following 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 over 4% next year,” he continued. We’re supposed to achieve 3.2% this year in Nigeria, they say.
In addition to these important factors, Obiorah mentioned the conflict between Russia and Ukraine and the shift from goods to services.
As the two nations are major exporters of commodities, we are aware that the conflict between Russia and Ukraine is having a significant impact. The world’s sunflower exports, which total 30%, are both accounted for by these two countries. So you know what will happen to food prices around the world when such a region is at war.
As services are typically more expensive, there has been a shift in demand away from goods. In addition, power cuts and China’s zero COVID policy are causing disruptions, he added. “Power is also not as valuable as it once was due to the switch from coal to more renewable energy sources,” he said.
According to the economic policy expert, supply chain disruptions are also a result of China’s high rate of investment in real estate services.
Today, the property market in China is experiencing some corrections as well. A large portion of Chinese people don’t possess the same types of investment vehicles as, say, the average American.
A significant portion of them invested their savings in real estate. But as a result, China is currently experiencing an oversupply of housing. 65 million apartments in China are unoccupied.
That is sufficient to take care of all of France’s citizens, he continued. Delays in the supply chain are thus a result of that correction.
“The ratio of Nigeria’s non-oil exports to GDP was 0.8% in the ten years between 2001 and 2011,” he said. And as you can probably guess, from 2012 to 2022, we stayed at 1.2%, indicating an increase of 0.4% over that period.
We should expand much more quickly. Countries that are significantly smaller than us are faring much better, he urged.
Using the ratio of their non-oil exports to GDP, Obiorah also contrasted some nations’ land area with Nigeria’s.
The Netherlands has 34,000 square kilometers of land, he said.
“Consequently, if you add water, you reach 42,000. You may find it interesting to know that 29% of the Netherlands’ GDP comes from non-oil exports. They typically export non-oil goods worth $108 billion.
Remember that the Netherlands is actually the same size as Niger State and smaller than it. Another illustration will follow. Ireland, a nation with a land area of only 70,000 square kilometers, regularly exports goods worth $170 billion that are not made of oil, which helps us do better.
