Naira exchange rate, worrying rise in inflation – Gwadabe – The Sun Nigeria

President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, said that the volatility amid Foreign exchange interventions by the Central Bank of Nigeria (CBN) have been compounded by rising inflation, rising interest rates and slowing economic growth, with implications for middle and low incomes.

Speaking in Lagos over the weekend, Gwadabe said the unfolding scenarios increase the risk of stagflation with potentially harmful consequences for the poor within the economy. He said global growth is already expected to fall from 5.7% in 2021 to 2.9% in 2022, significantly lower than the 4.1% forecast by the International Monetary Fund (IMF) in January.

To keep the Nigerian economy strong in the face of these challenges, Gwadabe called for improving local production and diversifying the economy away from oil.

He said naira trading at 614 naira/$1 in the parallel market, dollar bids continue to rise as inflation hit an 11-month high (17.71%) in May. These developments, the ABCON boss said, are eroding household purchasing power.

“The main driver of inflation is the stubborn rise in food inflation. The average price level of the food basket increased by 1.13% to 19.50% in May against 18.37% in April. This can be reversed by increased support for agriculture and government policies that support the sector,” he said.

Gwadabe said Nigeria’s huge diaspora population and market, which attracts an average of $20 billion a year, can be tapped to deepen dollar inflows into the economy.