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Economy: Nigerians should expect reduction in fuel prices, inflationary pressures –CBN Governor

*Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, hints besides a decline in inflationary pressures, the expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience while boosting consumer confidence and purchasing power

Gbenga Kayode | ConsumerConnect

Dr. Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has hinted at a reduction in prices of petroleum products in the course of year 2024, to have positive impact on the country’s economy.

ConsumerConnect reports Dr. Cardoso stated this at the unveiling of the Nigerian Economic Summit Group’s (NESG) 2024 Macroeconomic Outlook Wednesday, January 24, 2024, in Lagos.

Dr. Olayemi Cardoso, Governor of CBN

The CBN Governor’s pronouncement on the imminent reduction of fuel costs came amid Nigerians’ optimism resulting from the recent completion and test-running of the mechanical rehabilitation phase of the Port Harcourt Oil Refinery Complex, in Rivers State, and subsequent activation of production of petroleum products at Dangote Petroleum Refinery, in Lagos.

Cardoso said the anticipated moderation in pump prices of Premium Motor Spirit (PMS), otherwise  known as petrol, due to the expected operational status of the country’s key government and privately-owned refineries in 2024, is a pivotal factor in the economic equation.

He declared: “The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience.

“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 percent.”

According to him, all these will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.

“The CBN’s adoption of the inflation-targeting framework involves clear communication, use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour.

“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities. Additionally, the Bank has reverted to the conventional monetary policy approach with a focus on attaining price stability, which fosters sustainable economic growth for Nigeria”.

On CBN’s current Forex market  initiatives

In respect of the Bank’s initiatives on Foreign Exchange (Forex), Cardoso said the CBN’s collaboration with the Federal Ministry of Finance and the Nigerian National Petroleum Company Limited (NNPCL) to ensure that all FX inflows are returned to the Central Bank is yielding results.

The CBN Chief submitted that the coordinated effort would greatly enhance the Bankers’ Bank FX flows and contribute to the accretion of reserves.

“The expected stability in the Foreign Exchange market for 2024 can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN.

“This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage,” stated he.

Cardoso further explained: “The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term and our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years”.

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