Inflation Menace vs Pandemic Recovery: Guide for Nigeria Central Bank in 2022


Current central bank rate: 11.5%

Bloomberg Economics forecast for end of 2022: 13.5%

Bloomberg Economics forecast for end of 2023: 13.5%

Nigeria will likely keep its key rate on hold in the first quarter to bolster the recovery of an economy hard hit by the coronavirus pandemic and the collapse in the price of oil, its main export, in 2020.

Slowing inflation should support leaving policy unchanged.

Governor Godwin Emefiele signaled last month that the monetary policy committee’s existing stance should “continue for a little longer” to stabilize prices and buttress economic growth.

Nigeria’s economic recovery is expected to gather pace in 2022, especially in the second half, when current OPEC quotas expire.

The faster expansion, combined with the need to attract capital flows as developed markets starting tightening policy, is likely to lead officials to start hiking later in the year.

What Bloomberg Economics Says:

“Nigeria’s inflation remains above target, but the central bank has made it clear it wants to see a solid recovery before it raises rates. We don’t see this condition being met until the second half of next year.

The recovery remains fragile, with a slow vaccination rollout program and oil supply disruptions posing downside risks to growth.”

–Boingotlo Gasealahwe