The Governor of Central Bank of Nigeria, CBN, Mr. Godwin Emefiele, yesterday, painted a gloomy picture of the economy during a closed-door meeting with senators.
Since assumption of office, Nigeria’s President Muhammadu Buhari has failed to urgently act in the face of an economic crisis.
The CBN governor told the senators that it was frightening that the nation was experiencing economic stagnation and inflation at the same time, explaining that ordinarily, both were not supposed to happen simultaneously.
A source said he expressed concern that the economy was gloomy, stagnant and worsening as a result.
According to the source, Emefiele, who noted that the economy was biting on all, with almost all activities crippled, said indices that would have made the economy grow were not in place at the moment.
He was also said to have made reference to the renewed bombing of pipelines by Niger Delta Avengers as one of the factors pulling down the economy.
The CBN governor was said to have Iinked these occurrences, especially with respect to the over 70 per cent decline in oil prices from about S116 per barrel in June 2014 to about $30 per barrel earlier in the year.
NewsWireNGR recalls Consumer Price Index (CPI) measuring inflation in the Nigerian economy has risen to its highest point of 16.5 per cent since 2005.
Report released by the National Bureau of Statistics (NBS) shows that inflation for the month of June spiked to its highest point since October 2005 — 11 years. Inflation rose from 15.6 percent in May 2016 to 16.5 percent in June 2016, as energy and food prices weigh in heavy on inflation for the month.
“In June, the Consumer Price Index (CPI) which measures inflation continued to record relatively strong increases for the fifth consecutive month. The Headline index increased by 16.5% (year-on-year), 0.9% points higher from rates recorded in May (15.6%),” NBS said.
Briefing journalists after the meeting, Deputy Chairman, Senate Committee on Media and Public Affairs, Senator Ben Murray-Bruce, said the Minister of Finance, Kemi Adeosun, would today appear before the Senate to brief it on the state of the economy and issues relating to the implementation of 2016 budget.
Asked why the meeting with the CBN governor was held behind closed doors, Senator Bruce explained that it became imperative to hold the meeting in an exclusive manner because some economic matters could be explosive, if held in the open.
Meanwhile, the International Monetary Fund said it expects Africa’s largest economy to contract by 1.8 percent this year, after having forecast in April a 2.3 percent expansion.
Nigeria’s stall, and sluggish activity in the number two economy, South Africa, is expected to pull down economic growth across sub-Saharan Africa, the IMF said, forecasting a “dramatic implication.”
“In 2016, regional output growth will fall short of population growth, implying declining per capita incomes,” it said.
Nigeria’s economy has been battered hard by the plunge in oil prices, the main source of the country’s income, as well as prices of other key commodities.
In addition, rebels in the southern oil region have forced crude production cutbacks, and internal unrest, especially attacks by the Boko Haram group in the north, has also hurt the economy.
Inflation hit an 11-year high of 16.5 percent in June as prices of food and energy jumped after the government freed up the naira currency in April, allowing it to plummet against the US dollar.
Also weighing on output have been electricity shortages due to rebels’ sabotage of the gas pipelines that fire power plants.
