Economy
CBN Foresees Inflation Cooling from May 2024
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) is forecasting an ease in inflation from May 2024 but expects the average prices of goods and services to peak at 32.63 per cent in March 2024.
The Deputy Governor of the bank for Economic Policy Directorate, Mr Muhammad Sani Abdullahi, said this at the CITI-CEEMA Macro Conference held on Wednesday in London.
Nigeria’s inflation rose to 31.70 per cent in February 2024 from 29.90 per cent in January 2024.
Mr Abdullahi attributed the spike in inflation to three major factors: escalated energy costs, the impact of exchange rate fluctuations, and ongoing insecurity concerns.
“Headline inflation is expected to rise to 32.63 per cent in March 2024, due to high energy prices. Lingering impact of fuel subsidy removal, resulting in an increase in the cost of household utilities, transportation and production costs.
“Depreciation of the Naira resulting from the market-determined exchange rate policy is likely to have a passthrough effect on domestic prices.
“Impact of insecurity on food production, the winding down of the harvest season, and high cost of farm input could impact negatively food prices,” he said.
The CBN, however, anticipates a turnaround, with inflation expected to start its downward trajectory beginning in May 2024.
This optimism is based on a series of strategic measures to tackle rising inflation. Among these is the adoption of an inflation-targeting framework, deploying more active communication strategies, and shifting towards a tighter monetary policy stance.
The inflationary surge expected in the next two months is likely to happen despite tightened monetary policy by the Central Bank.
At the last Monetary Policy Meeting (MPC) in February, the apex bank increased the benchmark interest rate by 400 basis points to a record 22.75 per cent. The lender also increased the Cash Reserve Ratio (CRR) to 45 per cent from the prior 32.5 per cent.
Furthermore, adjustments have been made to the asymmetric corridor around the MPR to +100/-700 basis points from +100/-300 basis points, signalling a robust stance on managing inflation expectations.
Justifying reasons for the hike, the CBN Governor, Mr Yemi Cardoso, explained that members considered various scenarios including whether to hold or hike policy and concluded that inflation could become more persistent in the medium term and pose more regulatory issues if not well-anchored.
By all indications, there are signals that more rate hikes will happen at the meeting scheduled to start on Monday, March 25.
By Adedapo Adesanya
Nigeria received its first credit rating upgrade since 2012 from S&P Global Ratings, driven by improved oil market conditions and the country’s growing ability to refine and export crude locally.
The credit ratings agency upgraded the country’s rating by one notch to B, five levels below investment grade, according to a statement on Friday.
It raised its long-term foreign and local currency sovereign credit ratings on Nigeria to ‘B’ from ‘B-‘ and affirmed its ‘B’ short-term ratings. It also raised its long- and short-term Nigeria national scale ratings on the sovereign to ‘ngA+/ngA-1’ from ‘ngBBB+/ngA-2’.
S&P also cited Nigeria’s decision to liberalise the exchange rate as crucial to the development, and changed the outlook to stable.
The decision also comes as the federal government ruled out the reintroduction of subsidies on refined petroleum products, in order to avoid a return to larger budgetary deficits and drains on foreign currency (FX) liquidity.
S&P projected the general government deficit will widen to over 4 per cent of GDP on average during 2026 and 2027, a year of a general election.
It added that the implementation of reforms to broaden the tax base from very narrow levels is underpinning a steady decline in Nigeria’s debt-to-revenue ratio to 338 per cent in 2026 versus 500 per cent in 2023.
The agency said it could raise ratings over the next two years if fiscal outcomes improve significantly, either due to fiscal consolidation or structurally higher revenue, resulting in lower debt service costs.
It, however, warned that it could also lower the ratings if the implementation of Nigeria’s reform programme, particularly the series of critical steps taken to liberalise the exchange rate in 2023, reverses.
On the oil production forecast, S&P expects 2026 production to average approximately 1.66 million barrels per day, including condensates.
By Modupe Gbadeyanka
The Nigerian maritime sector may soon witness the inflow of $600 million in investment from APM Terminals.
On the sidelines of the ongoing Africa CEO Forum in Kigali, Rwanda, the Regional President of APM Terminals for Africa-Europe, Mr Igor van den Essen, informed President Bola Tinubu that his company was interested in deepening its investment in Nigeria.
According to a statement issued by the Special Adviser to the President of Information and Strategy, Mr Bayo Onanuga, the investment would be deployed in Apapa port modernisation, logistics infrastructure, and long-term private-sector investment in Nigeria’s maritime sector.
President Tinubu welcomed the investments, emphasising that Nigeria is repositioning itself for greater competitiveness through ongoing economic reforms and infrastructure modernisation.
He said the country is determined to move beyond structural bottlenecks and outdated systems, stressing the need for advanced technology, faster cargo processing, and improved operational efficiency across the nation’s ports.
He emphasised that Nigeria possesses the market scale, talent base, and economic potential to support globally competitive maritime and logistics infrastructure investments and called on other investors to take advantage of Nigeria’s reform outcomes.
Earlier, Mr Igor van den Essen lauded President Tinubu’s reform agenda and policy direction, which had strengthened investor confidence and created renewed momentum for long-term infrastructure investments.
He described Nigeria as a strategic stronghold within its African operations, referencing over 20 years of collaboration and substantial existing investments in the country’s port ecosystem.
He reaffirmed his company’s commitment to expanding investments in Nigeria and disclosed plans to support the development of world-class terminal infrastructure and technology-driven port operations.
He also commended Mr Tinubu for establishing the National Single Window (NSW), which has streamlined trade procedures, improved Customs coordination, and reduced delays in cargo clearance.
By Adedapo Adesanya
Dangote Petroleum Refinery has filed a new lawsuit against the federal government over the fuel import licences issued to marketers and the Nigerian National Petroleum Company (NNPC) Limited.
Last week, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issued licences to six marketers for the importation of 720,000 metric tonnes of Premium Motor Spirit, known as petrol.
The marketers are NIPCO, AA Rano, Matrix, Shafa, Pinnacle, and Bono. The development comes amid claims by the NMDPRA that the Dangote Petroleum Refinery now supplies over 90 per cent of Nigeria’s daily petrol consumption.
Dangote said in the filing that the licences issued undermine its operations and contravene the law, which it argues allows imports only when domestic supply falls short.
Named in the suit against the country is the Attorney General and Minister of Justice, Mr Lateef Fagbemi. The federal government can only be sued via his office.
The case signals renewed tensions almost a year after Dangote withdrew an earlier lawsuit challenging similar licences. That case sought to nullify import permits issued to the NNPC and several traders.
The new filing asks the Federal High Court in Lagos to set aside import permits issued or renewed by the NMDPRA, arguing they breach an earlier order to maintain the status quo.
Dangote ended the earlier lawsuit in July 2025 without explanation, leaving unresolved questions over competition and supply in one of Africa’s largest fuel markets.
Nigeria has long relied on petrol imports due to underperforming state refineries. However, Dangote’s 650,000 barrels per day capacity refinery was touted to end that dependence.
Despite the presence of the facility, imports have continued to cover supply gaps as the refinery ramps up output.
The NMDPRA did not issue a single import licence in the first quarter of 2026 because the Dangote refinery had the capacity to meet Nigeria’s petrol demand.
Business Post gathered that only upon intervention by President Bola Tinubu were the licenses granted for the second quarter by the NMDPRA.
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