Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has highlighted the potential for prolonged monetary tightening if inflation persists, potentially hindering the country’s growth. This was stated in the foreword of the inaugural edition of the CBN’s Macroeconomic Outlook for Nigeria, recently released.
In his foreword, Cardoso emphasized that the central bank might continue its hawkish monetary policy, characterized by higher interest rates, should inflation continue to rise. This statement follows the National Bureau of Statistics’ (NBS) recent CPI report, which showed a month-on-month increase in inflation for June, the first since February 2024.
Cardoso also identified several risks to Nigeria’s positive domestic outlook. He pointed out that security challenges, supply-side shocks, and global geoeconomic fragmentation could intensify inflationary pressures.
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These issues, along with long-standing structural imbalances, could necessitate prolonged monetary tightening, thus potentially curbing the nation’s growth prospects.
He remarked, “The positive domestic outlook is, however, subject to certain risks, especially as security challenges, supply-side shocks, and global geoeconomic fragmentation could aggravate inflationary pressures.”
