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Cardoso Led Central Bank of Nigeria Unveils Comprehensive Strategy to Tackle Inflation in 2024

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In a highly anticipated keynote address at the launch of the Nigeria Economic Summit Group 2024 Economic Outlook report, Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), delivered a comprehensive overview of the apex bank’s strategic initiatives aimed at curbing the nation’s headline inflation rate. Cardoso expressed determination to reduce the inflation rate to 21.4 per cent by the end of the year, following a substantial increase to 28.92 per cent at the close of 2023—a 7.58 percentage point surge from the previous year’s figure of 21.34 per cent.

Governor Cardoso began his address by acknowledging the challenges posed by the significant inflationary pressures. However, he reassured the audience that the CBN had devised a multifaceted approach to tackle the issue head-on and restore economic stability.

“The anticipated moderation in pump prices of Premium Motor Spirit (PMS) due to the expected operational status of the country’s key government and privately owned refineries in 2024 is a pivotal factor in the economic equation,” remarked Cardoso.

Inflation-Targeting Policy: A Cornerstone of the CBN’s Strategy

At the heart of the CBN’s plan is the inflation-targeting policy, which Cardoso emphasized as a cornerstone of their strategy. This policy framework involves a combination of clear communication, the use of monetary policy instruments, and collaboration with fiscal authorities. By setting a specific target of 21.4 per cent, the CBN aims to provide a transparent and measurable goal for both the financial markets and the general public.

“The CBN’s adoption of the inflation-targeting framework involves clear communication, the use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour,” explained Cardoso.

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Agricultural Productivity as a Catalyst for Inflation Mitigation

Governor Cardoso highlighted the pivotal role of improved agricultural productivity in mitigating inflationary pressures. The CBN is set to implement initiatives and investments in the agricultural sector to increase output and stabilize prices. This move is not only expected to contribute significantly to reducing inflation but also to enhance food security and support the livelihoods of farmers across the nation.

“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent. This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power,” outlined Governor Cardoso.

Fuel Price Reduction and Economic Implications

Anticipating a reduction in the pump price of Premium Motor Spirit (PMS) in 2024, Cardoso cited this as a pivotal factor in the economic equation. The expected operational status of the country’s key government and privately owned refineries is poised to bring about a stabilizing effect on fuel costs, subsequently influencing inflation. A decrease in fuel prices would have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience.

“The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience,” stated Cardoso.

Global Supply Chain Easing and Its Impact on Inflation

The easing of global supply chain pressures was also highlighted as a contributing factor to the CBN’s efforts to combat inflation. Governor Cardoso emphasized that a reduction in external pressures on the supply chain would benefit businesses by enhancing consumer confidence and purchasing power. This, in turn, is expected to lead to a decline in inflationary pressures, providing relief to both businesses and consumers alike.

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“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities,” Governor Cardoso affirmed.

Implications and Economic Outlook for 2024

Governor Cardoso concluded his address by emphasizing the profound impact the forecasted decrease in inflation for 2024 would have on businesses. A more predictable cost environment could lead to lowered policy rates, stimulating investment, fueling economic growth, and creating job opportunities.

“Additionally, the Bank has reverted to the conventional monetary policy approach with a focus on attaining price stability, which fosters sustainable economic growth for Nigeria,” Governor Cardoso concluded.

In summary, the unveiled strategies by the CBN, encompassing inflation-targeting policies, agricultural productivity enhancement, anticipated fuel price reductions, and the easing of global supply chain pressures, present a comprehensive and optimistic outlook for Nigeria’s economic landscape in 2024. The nation watches with anticipation as these measures are implemented, hopeful for a return to economic stability and growth.

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