As other countries across the globe waged war on rising prices, Africa’s largest economy experienced periods of cooling inflation.

This anomaly was a welcome development for the Central Bank of Nigeria (CBN) and offered room for interest rates to be left unchanged in an effort to stimulate economic growth.

Fast forward to today, Nigeria’s annual inflation is back on the rise – accelerating for the fourth straight month to 17.71% in May.

It was the steepest inflation rate since last June, fuelled by rising food prices, soaring diesel prices, and ongoing dollar shortages.

On top of this, surging global commodity prices and pre-election spending have the potential to fuel the fire – especially after the IMF projected prices to rise between 18% and 22% in 2022.

The war in Ukraine has propelled global oil prices to levels not seen since 2014. This has sent shockwaves across the world and prompted central banks to adopt an aggressive approach toward raising interest rates.

While other oil-producing countries are enjoying the gift of soaring commodities, Nigeria has failed to cash in thanks to sub-optimal oil production, heavy reliance on gasoline imports, and fuel subsidies.

Meaning that the current commodities boom is not translating to higher export earnings for Nigeria but to higher costs and inflationary risks.

During the first quarter of 2022, Nigeria’s economy slowed for the third consecutive quarter to 3.1%. The CBN projects economic growth to be 3.2% this year while the IMF sees the country expanding by 3.4%.

However, Nigeria’s economic outlook remains threatened by disruptive power outages, foreign exchange shortages, capital outflows, and untamed inflation.

Given how the CBN has triggered a tightening cycle, more hikes are expected down the road. Back in May, the central bank surprised markets with a 150-basis point rate hike.

With the CBN now focused on fighting inflation and interest rates rising rapidly across the globe, more hikes could be on the table to limit capital outflows.

According to a report on Bloomberg, the CBN is expected to raise interest rates by 50 basis points two additional times in 2022 – bringing benchmark rates to 14%.

Theoretically, the rate hikes could limit inflation risks at a time when external and domestic factors are threatening Nigeria’s economy.

Ongoing geopolitical risks, extreme weather, and supply-chain disruptions could feed the inflation monster, while pre-election spending ahead of the general elections is likely to exacerbate the negative situation.

But the burning question is whether Nigeria is in a position to handle higher interest rates? Time will tell.

For more information, visit: FXTM

The post Inflation Timebomb Threatens Nigeria’s outlook appeared first on Tech | Business | Economy.

Ut nec diam ornare lectus bibendum ultricies id vitae turpis. Pellentesque lectus arcu, facilisis et felis a, ultrices fermentum erat. Fusce gravida, dui sit amet tincidunt aliquam, tellus nulla consequat velit, fringilla ullamcorper neque ipsum sit amet mauris. In in viverra turpis, eu condimentum nibh. Sed auctor nunc turpis, ut venenatis quam laoreet nec. Nam mattis nisl tellus, at consectetur sapien ultricies at. Quisque hendrerit et massa in eleifend. Vestibulum tempor odio ac magna tincidunt dignissim. Curabitur at elementum odio. Nunc hendrerit quam sem, sit amet elementum risus aliquet id. Curabitur velit nisi, molestie ac dictum non, tempus lobortis massa. Duis dapibus nisl id tortor aliquet, sit amet sollicitudin est pulvinar. Integer luctus varius pulvinar.

Suspendisse ac risus sit amet sem accumsan lobortis. Duis faucibus dui at odio accumsan facilisis. Suspendisse ultrices fermentum suscipit. Sed nec efficitur purus. Pellentesque lacinia lorem vitae accumsan imperdiet. Phasellus nec vehicula augue. Nulla luctus, augue in ultrices elementum, mi eros maximus mi, id bibendum diam sem in massa. Sed condimentum, urna nec finibus tincidunt, lorem leo interdum lorem, quis viverra ipsum mauris in felis. Cras vestibulum orci in lectus tristique vestibulum. Nunc iaculis dolor eu nunc faucibus, vel auctor elit volutpat. Ut in maximus quam, gravida suscipit quam. Vivamus vestibulum fermentum neque, nec sagittis nisl tincidunt a. Vivamus ac ornare eros, vitae posuere sapien.

Quisque gravida arcu vel tellus convallis rhoncus. Nulla sit amet dui nec nunc euismod rutrum nec at tortor. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Sed eleifend eros eget nibh tincidunt molestie a id odio. In quis ultricies augue. Ut eu arcu varius, sodales orci eu, lacinia sem. Sed porttitor aliquam ligula pretium vulputate. Nam mollis urna in leo bibendum, ut bibendum massa tincidunt. In dictum nibh et vulputate imperdiet. Etiam bibendum tortor convallis mauris malesuada, id tincidunt turpis aliquam. Curabitur placerat euismod leo, congue faucibus orci accumsan vel. Curabitur ac dolor ut metus lobortis tempus sed in orci.

Nam vitae bibendum ante, nec maximus magna. Donec suscipit, nunc eu euismod elementum, arcu mi sagittis lectus, et pretium est lectus et augue. Morbi quis massa pretium nibh gravida fermentum ac vel turpis. Phasellus blandit est elit, ullamcorper tempus sapien fermentum ac. Suspendisse condimentum ornare fermentum. Integer sit amet elementum odio, vel luctus nisl. Fusce viverra ac felis eu ultrices.

The post Get the picnic snacks at heavy discounted price appeared first on Tech | Business | Economy.