CBN projects economic rebound in Q1 2021, see 2.0% GDP next year
The Central Bank of Nigeria (CBN) has projected that the nation’s economy is expected to bounce back by the first quarter of next year and post 2.0 percent Gross Domestic Product (GDP) at the end of 2021.
CBN Governor, Godwin Emefiele said this while speaking with bankers, top business and private sector players at this year’s bankers’ dinner in Lagos organised by the Chartered Institute of Bankers of Nigeria (CIBN).
“With sustained implementation of our intervention measures, we do expect that the Nigerian economy could emerge from the recession by the first quarter of 2021. We also expect that growth in 2021 would attain 2.0 percent,” Emefiele said at the dinner.
However, the governor cautioned that the projection is hinged on the restoration of full economic activities in view of the prevalent of the Covid-19 across the globe.
He said with the significant rise in cases in advanced markets and the imposition of lockdowns in parts of Europe, concerns remain on the impact this could have on growth in advanced economies, commodity prices and the financial markets.
“We must therefore find ways to insulate our economy from the impact of these shocks through our diversification efforts, while also working to ensure that we adhere to safety protocols in order to prevent a surge in COVID-19 related cases, as this could further cripple economic activities.
He said the regulatory bank actions in 2021 would be guided by the considerations that emerged from the Monetary Policy Committee (MPC) meeting of November 23 & 24, 2020, which sought to address the major headwinds exerting downward pressure on output growth and upward pressure on domestic prices.
He said given the fact that the rise in inflation is not due to monetary factors but rather the
prevalence of structural rigidities and supply shocks, “traditional tools of monetary policy
may not be helpful in addressing current inflationary pressures.
“Rather, a more useful policy will be the supply-side measures implemented by the Bank. As a result, emphasis will be placed on strengthening the development finance initiatives of the CBN in order to stimulate greater production and reduce unemployment,” Emefiele said.