Concerns Mount Over Nigeria’s Deteriorating Economic Activities by CBN

The Deputy Governor of Corporate Services at the Central Bank of Nigeria, Bala Moh’d Bello, expressed deep concerns regarding the declining economic activities within the country during the last Monetary Policy Committee meeting.

He highlighted that the Composite Purchasing Managers’ Index (PMI) dropped significantly to 39.2 index points in February 2024 from 48.5 index points in the previous month, indicating a substantial decrease in economic performance.

Bello emphasized that the economic downturn has persisted for eight consecutive months, attributing it to various factors such as exchange rate pressures, inflationary pressures, security challenges, and other obstacles.

He underscored the urgent need for well-thought-out policy decisions aimed at maintaining price stability to prevent further hindrances to economic activities and to safeguard output performance.

Read Also: CBN Halts Onboarding of New Customers for Opay, Moniepoint, and Others

Bello also expressed alarm over the escalating inflation rates, despite previous monetary policy rate hikes, with forecasts indicating further price hikes in the near future.

Both food and core inflation rates surged in February 2024, leading to a rise in headline inflation to 31.70 per cent from 29.90 per cent in the previous month.

The persistent inflationary trend was primarily attributed to high production costs, ongoing security challenges, and exchange rate pressures.

Bello further highlighted that inflation had spiked to 33.22 per cent in March, emphasizing the urgent need for coordinated efforts to combat this unacceptably high inflation rate.

He stressed that such high inflation levels have detrimental effects on citizens’ purchasing power, investment decisions, and overall economic performance, necessitating decisive actions to address the situation effectively.