PwC has expressed concern over Nigeria’s economic outlook, highlighting ongoing uncertainties despite the Central Bank of Nigeria’s (CBN) efforts to stabilize the foreign exchange (FX) market.
The firm points to persistent inflationary trends and FX volatility as major obstacles dampening investor confidence.
The CBN, led by Olayemi Cardoso, has implemented aggressive monetary policies, including raising interest rates by 800 basis points to 26.75 percent in an attempt to combat Nigeria’s high inflation. However, these measures have yet to significantly impact the soaring consumer prices.
Food inflation has surged from 25.25% in June 2023 to 40.87% in June 2024, driven by factors such as insecurity, climate change, and emigration from food-producing areas.
While the naira was once the best-performing currency globally, it has deteriorated significantly, being quoted as the second least performing currency in July.
The naira’s value fell by 48% against the dollar between the first halves of 2023 and 2024.
PwC anticipates that increased oil refining capacity, government efforts to ensure food security, and support from the African Development Bank could help alleviate inflation and improve the macroeconomic environment.
The ongoing banking recapitalization is also seen as a positive step towards achieving Nigeria’s $1 trillion economy goal by 2030 and fostering growth in the equities market.
