Prohibition of food import to forex access spikes inflation- Rewane

Chief Executive Officer, Financial Derivative Company, Bismarck Rewane has said that prohibition of food import to foreign exchange access could result in higher imported food inflation.

Rewane who made this statement in Lagos at the Lagos Business School (LBS) Breakfast session said currently import inflation stood at 16.39 per cent, adding that it could spike to 17 per cent after the ban.

This according to him would push headline inflation to 11.5 to 13.0 per cent in the fourth quarter of this year.

He, however said that gross external reserve projected to fall to $42 billion  in September 19, due to declining in oil prices and increased activities at the I&E forex window.

Rewane stated that $9 billion fine imposed  by British Commercial Court against Federal Government of Nigeria was not unusual, adding that it accounted for 22.55 per cent of reserves and it is likely  to depressed external reserve further.

Meanwhile,  Financial Derivatives Company limited,  FDC economic report  for September 6, 2019 said that decline in real Gross Domestic Product in second quarter of this by 0.16 per cent to 1.94 per cent was below expectations, making the attainment of the annual projection of 2.2 per cent a tall order.

The report also explained that with the first and second quarter, the economy has achieved an average growth of 2.02 per cent and 0.28 per cent below the International Money Fund’s (IMF’s) forecast of 2.3 per cent.

To achieve this growth target, it said the economy needs to grow by at least 2.6 per cent in the second half of  2019 and this calls for the use of proactive policies to boost aggregate investment and stimulation growth.

A breakdown of the GDP data showed that  six activities expanded, five contracted and eight decelerated.

It further stated that the contracting activies in this quarter were mainly those that are labour intensive and interest rate sensitive.

Explaining further it said those GDP that are fastest growing sector were in services – Oil.and gas 5.15 per cent, human health 1.13 per cent, education 0.96 per cent, contributing approximately 12 per cent to GDP and employ less than 10 per cent of the Nigerian labour force.

Matched content

Be the first to comment

Leave a Reply

Your email address will not be published.