The Central Bank of Nigeria (CBN) has expressed worry over the recent decline in economic activities in the country. According to Bala Bello, the CBN’s deputy governor of Corporate Services, the Composite Purchasing Managers’ Index dropped sharply to 39.2 index points in February 2024 from 48.5 index points in the previous month, indicating a contraction in economic activity for eight consecutive months.
Bello attributed this decline to various factors, including exchange rate pressures, rising input prices, security challenges, and other idiosyncratic headwinds. He emphasized the need for well-nuanced policy decisions aimed at ensuring price stability to prevent further stifling of economic activities and derailing output performance.
Despite sustained increases in the monetary policy rate, inflation has continued to rise, with both food and core inflation increasing in February 2024. This has led to an acceleration in headline inflation to 31.70 per cent from 29.90 per cent in the previous month. Bello highlighted high production costs, security challenges, and exchange rate pressures as the main drivers of this inflationary trend.
In response to the high inflation rate, Bello emphasized the need for decisive and coordinated efforts to curb it, considering its adverse impact on citizens’ purchasing power, investment decisions, and overall output performance.
Source: Punch