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IMF

IMF raises forecast for global growth in 2024 to 3.1%

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Washington, Jan. 31, 2024: The International Monetary Fund (IMF) on Tuesday said that it has improved its forecast for global economic growth in the coming year.

However, raising its expectations to 3.1 per cent from an earlier forecast of 2.9 per cent in October.

The IMF expects growth of 3.2 per cent in 2025.

“The clouds are beginning to part,” wrote IMF chief economist Pierre-Olivier Gourinchas in a blog entry, noting that inflation was declining and growth “holding up.’’

But in order to achieve this goals such as sustainable growth and greater prosperity, the pace of expansion must pick up, the IMF economist emphasised.

The IMF increased its 2024 growth forecast for the United States from 1.5 per cent in October to 2.1 per cent.

This would nonetheless be a slight slowdown for the world’s biggest economy, which grew by an estimated 2.5 per cent in 2023.

The IMF took a dimmer view of prospects for Germany, lowering its growth forecast for Europe’s largest economy to just 0.5 per cent for 2024.

The IMF had forecast 2024 growth of 0.9 per cent in Germany back in October.

For Germany, the IMF now predicts that economic growth will rebound to 1.6 per cent in 2025.

That, however, is 0.4 percentage points less than in the October forecast.

The IMF also expects the U.S. economy to cool down to 1.7 per cent growth in 2025.

Globally, the IMF sees geopolitical tensions, particularly in the Middle East, as a risk to growth.

Gourinchas pointed out that the attacks by the militant Islamist Houthi militia on freighters in the Red Sea a key shipping corridor leading to the Suez Canal have already led to a significant increase in prices for freight shipments between Asia and Europe.

The IMF forecast found that new software based on artificial intelligence could lead to higher labour productivity and income in the medium term.

While at the same time, the IMF’s experts believe that AI-based productivity growth will be felt more quickly in wealthy developed economies.

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Adedipe projects 3.74% economic growth

Lagos, Jan. 13, 2024: The Chief Consultant, B. Adedipe Associates Ltd., Dr ‘Biodun Adedipe, has projected that the Nigeria’s economy will likely grow by 3.74 per cent in the 2024 fiscal year.

He made the projection at a summit, organised by the FirstBank of Nigeria, with the theme; “Nigeria Economic Outlook 2024: Current Realities and Prospects’’, on Friday in Lagos.

Adedipe noted that most entities predict the economy to grow above three per cent in 2024.

“What I see more is an economy that will likely grow at about 3.74 per cent. The World Bank indicated 3.3 per cent. But, we in BA Consult see 3.74 per cent.

“International Monetary Fund probably will come later and revive their own, also in their outlook, and of course, different other entities. But, everybody is projecting this economy to grow at above three per cent this year,’’ he said.

Giving analysis of potential economic trends in Nigeria for 2024, with focus on interest rates, exchange rates, and gross domestic product growth, the Chief Consultant predicted that the Central Bank of Nigeria (CBN) might adopt an orthodox monetary policy approach.

According to him, this can potentially raise the Monetary Policy Rate (MPR) to narrow the gap with inflation.

He said that MPR might not change significantly in the first half of 2024 and with a decrease in the second half.

Adedipe, however, said that President Bola Tinubu’s desire to encourage consumer credit suggested a need for lower interest rates.

On exchange rate, Adedipe noted that some entities like the Economic Intelligence Unit (EIU) had predicted a drastic deprecation of the Naira, due to the unified exchange rate policy.

He said, “on exchange rate, different entities have done expectations for the exchange rate for Nigeria.

“if you look at JP Morgan, if you look at World Bank, IMF, the one that is frightening is EIU because they said if we continue with this unified exchange rate, we may see the Naira get to N2,000 to a dollar.

“But, I now say that it may not necessarily work out that way.’’

Based on various indications, including government pronouncements and budget assumptions, the Chief Consultant said that the official exchange rate was expected to average around N900 to the dollar.

He said, “So, looking at how the market has behaved between June 2023 and beginning of this year, we have an outlook of an average of official rate around N900.

“The pattern is this, typically, anytime there’s a major shift or destruction in any economy, a new equilibrium is created and that was what happened when fuel subsidy removal was implemented.’’

Adedipe also foresees the parallel market rate staying below N1,235 per dollar, saying though occasional fluctuations are possible.

He identified key drivers which are primary factors that would stabilize the Naira to be increased exports, driven by domestic manufacturing and focus on export value chains.

Adedipe painted a positive picture of Nigeria’s business potential, emphasising its large market, favourable trade trends, technological advancement, and mobile-first consumer base.

However, he highlighted the need for businesses to adapt to the changing landscape by embracing digitalisation and innovation.

The Chief Consultant noted that Nigeria’s large and diverse population, ranking sixth globally, offers a strong consumer base for various products and services.

This, he said, could be advantageous for businesses entering the Nigerian market.

He said that the global manufacturing trend, moving towards production in target markets, also presented an opportunity for Nigeria.

According to him, this aligns with the country’s large consumer base, making it an attractive location for companies to set up manufacturing operations.

Adedipe noted that Nigeria’s ICT sector had consistently been a top contributor to Gross Domestic Product (GDP), indicating rapid growth and potential.

He said this would open doors for businesses involved in technology and internet-based services.

He noted that Nigeria has a high smartphone penetration in the country with 94 per cent of internet access.

The financial consultant urged businesses to adapt their strategies to cater to the country’s tech-savvy population.

According to him, mobile-first approaches and digital solutions can be crucial for success.

He urged businesses to embrace digitalisation and incorporate technologies like Artificial Intelligence into their business models.

This, Adedipe said, was essential for remaining competitive in the 21st century.

Besides, he advised companies to look for opportunities to automate processes and digitise end-to-end operations.

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Economic growth in Sub-Saharan Africa to drop by 3.3% in 2023 – IMF

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Abuja, Oct. 12, 2023: Amid global slowdown and political instability, growth in Sub-Saharan Africa (SSA) is expected to fall to 3.3 per cent this year from 4.0 per cent recorded in 2022.

This is according to the latest International Monetary Fund (IMF), Regional Economic Outlook for SSA: “Light in the Horizon’’ released at the World Bank Group/IMF 2023 Annual Meetings in Marrakech, Morocco.

The report said the funding squeeze in the region was not over.

“For Sub-Saharan Africa, the inflationary shock following Russia’s war in Ukraine has meant a growing number of people in situations of acute food insecurity, slowing international demand.

“Also, higher borrowing costs and ongoing exchange rate pressures, yet another shock for a continent still emerging from the COVID-19 pandemic.

“The region has also faced increased political instability over the past few years, with recent military takeovers highlighting the implications of fragility.

“As a result, growth in 2023 is expected to fall to 3.3 per cent from 4.0 per cent in 2022,’’ the IMF outlook forecasted.

The IMF outlook, however, said external conditions were improving, and although the global environment remained difficult, there had been some welcome improvements in the past six months.

“The pandemic is over (for now), consumption has proven unexpectedly resilient across a number of large economies, and global inflation is slowly falling.

“Also, borrowing costs have eased, and food prices have dropped, this is good news for a region grappling with an acute cost-of-living crisis and an already-troubling incidence of poverty,’’ it further said.

The IMF also said that macroeconomic imbalances were declining, stating that across the region, inflation was falling, public finances were stabilising, and much-needed subsidy reforms had been put in place in select countries.

“The median public debt ratio has stabilised at around 60 per cent of Gross Domestic Product (GDP), halting a 10-year upward trend.

“Median inflation peaked in March at almost 10 per cent and is now around seven per cent in July.’’

The report further says a rebound was on the way where growth would rebound to 4.0 per cent in 2024, with rates improving in around four-fifths of the region’s economies.

It said that Non-resource-intensive countries would continue to perform strongly.

“The outlook in the region is less ominous, but it is too early to celebrate.

“In many cases, inflation is still too high, government borrowing costs are still elevated, exchange rate pressures persist, energy prices remain volatile, and political instability is an ongoing concern.’’

The IMF, therefore, recommended four policy priorities for the region.

The first policy is to pause monetary policy tightening where inflation is both falling and on the target path.

“In countries with elevated and rising inflation, however, further tightening is warranted.

“The second policy is to reduce debt vulnerabilities while creating space for development spending. This demands a delicate balance between raising revenues and protecting growth.

“Third policy is to allow the exchange rate to depreciate where needed, while also working to mitigate some of the follow-on effects of depreciation, including higher inflation and increased debt payments.

“The fourth policy is to invest in the future to improve living standards, particularly in resource-intensive countries where per capita income growth is expected to remain very low.

“Reforms include more investment in education, better management of resource-based wealth, improved business climate, digitalisation, and greater trade integration,’’  the report said.

The IMF said international solidarity remained essential, saying amid large development needs, Official Development Assistance to the region was trending downward.

“The IMF has provided policy guidance and financing of 55 billion dollars since the start of the pandemic, more than twice the amount disbursed in any 10-year period since the 1990s and much at zero interest.

“In the region, five arrangements have been approved under the Resilience and Sustainability Facility, and four countries have received a combined 358 million dollars from the new Food Shock Window.’’

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FG set to achieve double digit economic growth –  Minister

Abuja,  Aug. 23, 2023: The Minister of Budget and Economic Plannig, Atiku Bagudu, says the present administration will strive to achieve double digit economic growth.

Bagudu said this in his maiden address on assumption of office  on Tuesday in Abuja.

According to him, double digit economic growth has been the goal of President Bola Tinubu, as it will be inclusive to every part of the country.

“The president has always been emphatic that if other countries have done it, why not us, why not a double digit growth, why not inclusion for all, an economy that promotes and rewards competition and efforts.

“We have seen bold and courageous actions in order to reposition Nigeria and he has placed an institutional arrangement that he believes will lead Nigeria to have sustained double digit growth.

“This will enable us achieve our economic objectives at which the ministry is central to the government achieving it,” he said.

He said that the merger of the functions of the national Planning Commission and the budget office of the federation under the ministry of Budget and Economic Planning was a major policy change introduced by the president.

Bagudu said that the framework for coordinated planning and budgeting roles within the ministry was to develop appropriate institutional framework to effectively operationalise them.

Bagudu said that this would be done through harmonisation of planning frameworks,  alignment and prioritisation of medium term development plans.

“Presidential priorities and targets campaign manifesto with sector medium term and strategic reports that are in sync with sustainable development goals,” he said.

Bagudu said that there was the need to prioritise and conceptualise on how to promote Nigeria.

He said that he would adopt an open door policy, stating that the ministry was an institution of knowledge that could do better through exchange of ideas.

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Mid-year review: NESG predicts stronger economic growth

Lagos, Aug. 16, 2023: Mr ‘Laoye Jaiyeola, the Chief Executive Officer, Nigeria Economic Summit Group (NESG), has predicted a stronger economic growth in 2023 as firms’ new orders, output growth rate, and inventory activities increase.

Jaiyeola said this at the third Edition of the Mid-Year Review of 2023 Economic Outlook, organised by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS), on Tuesday, in Lagos.

The programme, 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.

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.

Earlier, Dr Ken Opara, the CIBN President, commended the speakers, noting 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.

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West Africa experiences slower economic growth in 2023 – AfDB report

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Abuja, Aug. 10, 2023: West Africa experienced slower economic growth in 2023, except for Cape Verde, The Gambia, Guinea, Mali, and Niger, says the African Development  Bank (AfDB).

AfDB said this in its  2023 West Africa Economic Outlook report which was released  on Wednesday in Abuja.

The report, is entitled “Mobilising Private Sector Financing for Climate and Green Growth in West Africa.”

According to the bank, the report assessed the economic performance of 15 West African countries.

It named the countries to include Benin, Burkina Faso, Cape Verde, Côte d’Ivoire,  The Gambia and Ghana.

Others included, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

“The report provides key economic trends in 2022 as well as medium-term (2023-2024) economic forecasts for the region.

“ It also evaluates strategies to accelerate the mobilisation of private sector financing for climate and green growth in West Africa,” it said.

According to the report, West Africa’s average Gross Domestic Product (GDP) decelerated to 3.8 per cent in 2022 from 4.4 per cent in 2021.

The implication, it said, implied that the growth recovery from the 2020 downturn had slowed.

It attributed the decelerating growth to successive shocks such as the resurgence of COVID-19 in China, a major trade partner for the region’s countries.

It said Russia’s invasion of Ukraine had also spurred inflationary pressures on the cost of food, fuel and fertilizer in many West Africa region countries.

The report further revealed that advanced economies had also tightened monetary policy which had heightened aversion to risk globally and increased exchange rate pressures.

According to the report, the region’s GDP growth outlook is positive, and projected to pick up slightly, hitting 3.9 per cent in 2023 and 4.2 per cent in 2024.

It, however, staid that transition to green growth would require greater resources.

The report said that adapting to climate change and the depletion of the region’s natural resources presented an opening for businesses and governments to embrace sustainable and green growth.

According to the report, West Africa has enormous potential to achieve green growth, green industrialisation being the most obvious pathway.

It said the rationale for green growth across the region was quite comprehensive.

“ Climate change impacts and risks, natural capital depletion, poverty, and food insecurity, limited employment creation and many capital-intensive enclaves,” it said.

It quoted Prof. Kevin  Urama, AfDB’s Chief Economist,  as saying “multiple challenges had led to rising interest rates and were compounding debt service payments to African countries” .

Urama said these included climate change, inflation driven by higher prices of energy, commodities, and disruption of supply chains, and the tightening of monetary policy in the United States and Europe.

He said that greater effort would be needed in Africa to mobilise domestic resources and private sector financing to help countries achieve climate and green growth transitions.

He said: “Africa is being short-changed in climate financing.

“The continent will need between 235 and 250 billion dollars annually through 2030 to meet investments under its nationally determined contributions.

“Yet, Africa received only about 29.5 billion dollars in climate financing between 2019 and 2020.

“Private sector financing to support climate adaptation and mitigation in Africa is estimated at just 4.2 billion dollars from 2019-2020, the lowest of any region of the world.

“Africa’s private-sector climate financing gap is estimated to reach 213.4 billion dollars annually between 2020 and 2030,” it said.

 Urama, also the  AfDB’s Vice President for Economic Governance and Knowledge Management  said Africa could accelerate green development transitions by optimising its natural capital, estimated at about 6.2 trillion dollars in 2018.

He said the continent, however, was not getting the best out of its natural resources because of poor valuation, degradation, illicit capital flows and losses from royalties and taxes.

Meanwhile, AfDB’s lead economist, Guy-Blaise Nkamleu, said Guinea-Bissau, Mali, Liberia, and Niger were ranked among the ten most vulnerable countries to climate change and environmental hazards worldwide.

“To boost private sector financing for climate change and green growth, innovative instruments and mechanisms need to be deployed by West African governments to attract private sector financing,” Nkamleu said.

IMF

Global economic growth to drop to 3.0% in 2023-24 – IMF

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Abuja, July 25, 2023: The International Monetary Fund (IMF) says global growth is projected to fall from 3.5 per cent in 2022 to 3.0 per cent in both 2023 and 2024.

This is according to the IMF’s latest World Economic Outlook (WEO) Update Report for July 2023: “Near-Term Resilience, Persistent Challenges” released on Tuesday.

The report said though the forecast for 2023 was modestly higher than predicted in the April 2023 WEO, it remained weak by historical standards.

“Compared with projections in the April 2023 WEO, growth has been

upgraded by 0.2 percentage points for 2023, with no change for 2024.

“The forecast for 2023–24 remains well below the historical (2000–19) annual average of 3.8 per cent.

“It is also below the historical average across broad income groups, in overall Gross Domestic Product (GDP) as well as per capita GDP terms. ”

The report said advanced economies continued to drive the decline in growth from 2022 to 2023, with weaker manufacturing, as well as idiosyncratic factors, offsetting stronger services activity.

“For advanced economies, the growth slowdown projected for 2023 remained significant, from 2.7 per cent in 2022 to 1.5 per cent in 2023.

“About 93 per cent of advanced economies are projected to have lower growth in 2023, and growth in 2024 among this group of economies is projected to remain at 1.4 per cent.”

While the report said in emerging markets and developing economies, the growth outlook was broadly stable for 2023 and 2024, although with notable shifts across regions.

“For emerging market and developing economies, growth is projected to be broadly stable at 4.0 per cent in 2023 and 4.1 per cent in 2024, with modest revisions of 0.1 percentage point for 2023 and –0.1 percentage point for 2024.”

The report showed growth in Sub-Saharan Africa is projected to decline to 3.5 per cent in 2023 before picking up to 4.1 per cent in 2024.

It revealed that economic growth in Nigeria in 2023 and 2024 is projected to gradually decline, in line with April WEO projections, reflecting security issues in the oil sector.

The report showed that economic growth in Nigeria is projected at 3.2 per cent in 2023 and decline to 3.0 in 2024.

The report said Global headline inflation was expected to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024.

“Underlying (core) inflation is projected to decline more gradually,

and forecasts for inflation in 2024 have been revised upward. ”

It said inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy.

The report said financial sector turbulence could resume as markets adjust to further policy tightening by central banks.

“China’s recovery could slow, in part as a result of unresolved real estate problems, with negative cross-border spill overs.

“Sovereign debt distress could spread to a wider group of economies.”

It, however, said on the upside, inflation could fall faster than expected, reducing the need for tight monetary policy, and domestic demand could again prove more resilient.

The report said in most economies, the policy priorities remained to achieve sustained disinflation while ensuring financial stability.

“Therefore, central banks should remain focused on restoring price stability and strengthening financial supervision and risk monitoring.

“Should market strains materialise, countries should provide liquidity promptly while mitigating the possibility of moral hazard.

“They should also build fiscal buffers, with the composition of fiscal

adjustment ensuring targeted support for the most vulnerable.

The report said improvements to the supply side of the economy would facilitate fiscal consolidation and a smoother decline of inflation toward target levels.

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Nigeria targets inclusive economic growth with Bio-economy policy

Keffi (Nasarawa state), July 5, 2023: The Federal Government says it is targeting the use of its bio-economy policy to drive inclusive economic growth, wealth creation, employment generation and sustainable poverty reduction in the country.

Prof. Nebeolisa Anako, Permanent Secretary, Federal Ministry of Finance, Budget and National Planning (FMFBNP) stated this in Keffi local government area of Nasarawa state on Tuesday.

Anako represented by Dr Lanre Adekanye, Director, International Cooperation Department, FMFBNP (Budget and National Planning Arm) made the remarks at a North Central Regional Awareness and Sensitization Workshop on Bioeconomy, Employment and Inclusive Growth Using Cassava-Biothanol Value Chain Development Programme Pilot.

The theme of the workshop is “Knowledge Transfer: Cassava and Bio-Ethanol Value Chain”.

According to Anako, one of the aspirations of the Federal Government is to bring about higher Gross Domestic Product (GDP) growth and to significantly reduce unemployment by creating meaningful opportunities for the youth in the country with Bioeconomy as a viable option to achieve that.

He explained that the Bioeconomy Policy aims at promoting sustainable and inclusive economic growth and development by creating a Bio-based economy that will contribute to the job creation, poverty reduction, and increased access to food and energy.

“The country, at this time, needs an approach that will increase food production, youth employment, and increased growth through the provision of industrial feedstock and exportable products to boost our economy. To achieve this, one strategic pathway is to develop the Cassava Bio-ethanol Value Chain.

“I would like to thank stakeholders from relevant Federal Ministries, Department and Agencies (MDAs) for their collaboration and enduring partnership thus far in developing the Bio-economy Policy, which is a Ministerial deliverable that was captured in the National Development Plan (NDP) 2021 – 2025,” he said.

Anako pointed out that in driving the Bio-economy policy to decelerate the rising food insecurity in the country, an approach is needed that will increase food production, youth employment, and increased growth through the provision of industrial feedstock and exportable products to boost our economy.

“To achieve this, one strategic pathway is to develop the Cassava Bio-ethanol Value Chain. This becomes even more imperative, given the recent removal of subsidy on Petroleum products, re-evaluation of the Naira through the merging of official and non-official exchange windows.

“Development of the Bioeconomy value chain is a veritable pathway to assuage the economic impacts on citizens and for sustained development,” he said.

In his remarks, Prof. Suleiman Bala-Mohammed, Vice Chancellor, Nasarawa State University, Keffi (NSUK) lauded the workshop and it’s theme which he said reflected the pressing need to harness the power of Bioeconomy, particularly in the context of the North Central Region.

“North Central Nigeria has a rich agricultural heritage and cassava stands as one of the our most vital and versatile crops and it is crucial that we capitalize on these resources to unlock economic opportunities, create jobs and foster inclusive growth.

“The cassava-bioethanol value chain holds tremendous promise in this regard as it integrates various sectors from agriculture to energy and entrepreneurship,” he said.

In an interview with newsmen, Prof. Ken Ife, Managing Director of Biosources and Technologies Limited Keynote Speaker at the workshop described Bioeconomy as the knowledge based production and use of molecular biology of plant and animal origin and processes to create a wide range of products across all sectors of the economy.

He said the huge potential in cassava made it a natural choice to start the implementation of the Bioeconomy policy with the partnership of the academia, Research and Development Institutes, farmers, private sector and government MDAs as well as the Civil Society, Development Partners and Development Finance Institutions.

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Global growth slows to 2% in 2023 – World Bank

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The World Bank Group President, David Malpass says global growth is expected to be weak in 2023, slowing to 2 per cent from 3.1 per cent in 2022.

Malpass said this in his Opening Remarks at the Spring Meetings 2023 Media Call on Monday.

He said several factors were weighing on the second-half outlook.

“Oil prices have jumped back above 80 dollars/barrel. The recent banking sector stress dampens activity and inflation pressures persist.

Malpass said the U.S. month-over-month core inflation had been rising over the last five months, saying there will be new data on Wednesday.

“If we look at developing countries excluding China, we expect a slowdown to about 3.1 per cent in 2023 from 4.1 per cent in 2022.

“The concern in our recent reports is that slow growth will persist for years for many developing countries, increasing the fiscal stress and debt problems.

“It is a combination of weak investment, higher interest rates, and relatively weak growth in the advanced economies.”

He said the danger was acute due to inflation, currency depreciation, rising debt service costs, and the collapse of international reserves.

Malpass said the diversion of natural gas to Europe presented grave obstacles to developing country production of electricity, fertilizer, and food.

“These problems are severely constraining future growth and deepening inequality and fragility for developing countries.

“I travelled to West Africa in March, where we are working to provide support in the face of these problems.

“Looking to the big picture, I will mention two problems: first, the normalization of interest rates after an artificial decade near zero.

He said this created problems in terms of the duration mismatch seen in the bank failures, liquidity shortages, and how to allocate the losses.

“The duration mismatch will take time to digest. With inflation persistent and the dollar weakening, the risk is that the losses will be allocated to those with lower incomes, including through inflation.

Malpass said the second major problem was that the available global capital was being absorbed by a narrow group of advanced economies that have extremely high government debt levels.

“I will call them “sinkholes.” To make matters worse, their populations are ageing rapidly and the peace dividend of the 1990s was used up.”

He said he had advocated a range of new policies that would spur production to combat inflation and currency weakness.

“However, the likelihood is a long period of slow growth, asset repricing, and capital moving in the wrong direction.

“Moving toward a narrow group of governments and big corporations rather than to the small businesses and working capital that could add to global growth.”

Malpass noted two exceptions to the slowdown to include China and India.

According to him, China’s Gross Domestic Product growth is rebounding to over 5 per cent in 2023, with strong private investment.

“I note the stability of China’s currency and the countercyclical nature of its monetary policy. I was in China in December as they ended the lockdown.

“The government is encouraging growth in services, especially health care and tourism.”

Malpass said India continued to be one of the fastest-growing major economies in the world.

“We are looking for growth of 6.3 per cent in their FY23/24. They will feel some effects from the global slowdown.

“I was there in February and think it will take capital market liberalisation for India to achieve their 8 per cent growth goal.”

World Bank Group/International Monetary Fund 2023 Spring Meeting will hold from April 10 to April 16, 2023, in Washington DC.

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LCCI projects positive growth for year-end

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The Lagos Chamber of Commerce and Industry (LCCI) has projected that the Nigerian economy will end the year with a positive growth of three to four per cent.

Dr Michael Olawale-Cole, president, LCCI, said this at the LCCI 134th Annual General Meeting (AGM) on Thursday in Lagos.

The LCCI president stated that achieving the chamber’s projected growth required the fiscal and monetary authorities to promote policies to encourage private capital inflows to the economy.

He said fiscal and monetary authorities must develop a medium-term growth plan anchored on boosting local production, supporting ease of doing business and attracting private investment.

Olawale-Cole added that the authorities must also develop physical and soft infrastructure, business-friendly regulatory policies, economic diversification and employment generation, among others.

Addressing the country’s Gross Domestic Product (GDP) third quarter growth decline of 1.78 per cent year on year, the industrialist said the development was reflective of the challenging economic conditions.

He, however, posited that the annual GDP growth would close on a positive note for the year.

“It should be noted that emerging shocks, threats, and risks have created fears of slowing growth and even recession in the coming quarters going into the new year 2023.

“With the worsening security challenges in some parts of the country, foreign exchange scarcity, and high energy costs, growth may shrink as production bases come under siege, and supply chains disrupted leading to scarcity of goods in the markets.

“With worsening security perception about the country, and the coming of a new government, foreign investors are not interested in bringing in Foreign Direct Investments (FDI) to nigeria at this time.

“We have, however, in the course of the year, advocated for a well-coordinated synergy between the fiscal and monetary authorities, as well as members of the private sector in navigating the uncertain economic terrain.

“We would continue to engage with the government in creating an enabling business environment where the private sector is empowered to create jobs and generate revenue for the government,” he said.

Olawale-Cole projected that inflation would sustain its double-digit level in the short to medium term.

This, he explained, was largely driven by persistent food supply shocks, foreign exchange illiquidity, higher energy costs, speculative spending based on the naira redesign policy, insecurity and electioneering campaign spending.

“These structural factors will continue to mount pressure on domestic consumer prices,” he said.

Addressing the power sector, the LCCI president noted that the frequent collapse of the national grid showed that it could not supply sufficient power to meet the electricity demand of Nigerians.

He added that the sector recorded issues of vandalisation, disrupted gas supply, inability of distribution companies to take up generated power and the challenges of achieving 100 per cent metering for power consumers.

“With the cost of diesel at record levels and persisting poor power supply, businesses are running on unsustainable costs and producing at uncompetitive prices.

“This can lead to job losses if the output is constrained due to the unbearable cost of production.

“If not quickly tackled, these challenges will likely subdue the GDP growth potential and projections for 2022.

“The most sustainable solution to Nigeria’s power shortages is the transition to renewable energy and the decentralisation of the national grid,” he said.

Olawale-Cole said the activities of the chamber’s service committees and sectoral groups were sustained during the year in spite of the numerous challenges of the business environment.

According to him, all the committees and sectoral groups performed very well and the achievements recorded could not have been possible without the support and cooperation of everyone.

“I, therefore, would like to express my sincere appreciation for your cooperation and commitment to the promotion of the noble cause of our chamber.

“Our chamber is now the institution of first choice when foreign diplomatic missions, investment promotion agencies and business associations are seeking institutional partners to promote investment and trade between Nigeria and their various countries,” he said.

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