Mid-year Review: CIBNCFS discusses trends of economic indicators


The Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS), held its third Edition of the Mid-Year Review of 2023 Economic Outlook to discuss trends of economic indicators.

The programme, organised in collaboration with B. Adedipe Associates Ltd., is designed to evaluate the performance of the Nigerian economy in the prior half of the year while providing an outlook for the second half of the year.

Dr Ken Opara, the CIBN President, said that the half year review session was a follow-up on its 2023 National Economic Outlook held at the beginning of the year.

“More specifically, this review session is a follow-up on the 2023 National Economic Outlook, which was held at the beginning of the year, whereby actual performance and trends of economic indicators are analysed and compared with predictions asserted at the beginning of the year.

“Ultimately, it offers yet another prospect to forge valuable solutions amid the intricate challenges of this demanding year- transition in leadership,” Opara said.

He highlighted some of the the key events that shaped the first half of the year 2023 to include the cash scarcity in the regions of Nigeria which led to challenges in accessing physical cash, affecting day-to-day transactions for businesses and individuals, among others

Opara said given these myriads of challenges existing in the Nigerian economy, it became imperative for the institution to adopt a panoramic perspective on these issues, endeavoring to forge viable solutions.

Mr ‘Laoye Jaiyeola, the Chief Executive Officer, Nigeria Economic Summit Group (NESG), said in the midst of these challenges, the economic growth would be stronger in 2023 as firms’ new orders, output growth rate, and inventory activities increase.
According to him, the private sector performance is notably responding favourably to the current policy posture of the new government.

“The Purchasing Managers’ Index (PMI) is considered a perfect predictor of economic growth momentum in Nigeria and across the globe.

“Hence, there is a likelihood for stronger than expected economic growth in the remaining part of 2023 as firms’ new orders, output growth rate, and inventory activities increase,’’ he said.

Jaiyeola, however, predicted that initial policy shocks might increase inflationary pressure and worsen the cost of living crisis if not properly managed.

He said convergence of foreign exchange market rates would reduce currency risks adding that the new policy regime would stimulate investors’ confidence in the economy.

He added that the monetary policy interest rate would likely rise until the end of the year.

On socio-economic outcome, Jaiyeola said the initial policy shocks from foreign exchange rates convergence and petroleum subsidy removal would heighten the cost of living.

He said the situation would push more people into the poverty bracket as higher inflationary pressure would erode purchasing power of many households.

Dr ‘Biodun Adedipe, the Chief Consultant, Adedipe Associates Ltd., urged the Federal Government to learn from countries that had gone through similar problems, to get the economy back on track.

“Are there lessons that we can learn from other jurisdictions especially with our dependence on hydrocarbons; there are countries we can learn from like the Netherlands, Saudi Arabia, Malaysia, which had the same currency trouble because of supply just the same way we are having today.

“So what did the government do, they took a very firm stand and the bottom line was that the Malaysian economy recovered the following year.

“How about India, India did the monetisation that we also did in Nigeria but it was a fiasco; that was in 2018.

“The outcome in 2018 showed clearly that the monetisation of an economy that is largely driven by cash within a short window will cause trouble for the economy.

“So, the question should have been for us, when we wanted to do our own thing last year, to ask what lessons we can learn from them. And then take that on board and use that to find a way to execute our own,’’ he said.