Nigeria’s tight monetary policy will “continue in the near term” and the central bank will increase its funding to the agricultural sector, according to Governor Godwin Emefiele.
The central bank will be able to maintain a stable exchange rate given the strength of Nigeria’s reserves, Emefiele, 57, said at a conference in the commercial capital, Lagos.
The economy “will see more growth and reduced unemployment” from May 2019, when President Muhammadu Buhari’s second term formally begins after he was re-elected for four years last month, he said. “The Central Bank of Nigeria will aggressively deepen its foray into development banking. We shall ensure adequate support to the producers of products such as rice, fish, tomato, textile, palm oil and others.”
Since the election on Feb. 23, there have been more than $6 billion of flows into the naira bond market, which is helping shore up the currency, Emefiele said.
Gross domestic product growth will pick up in the first quarter and is forecast at 3 percent in 2019, slightly above the 2.4% consensus among analysts surveyed by Bloomberg, according to Emefiele. Inflation is expected to rise to about 12 percent and decelerate due to productivity gains in agriculture and manufacturing, the governor said. Consumer prices rose 11.3 percent in February.
The central bank will try to boost cocoa, beef and palm oil production in a bid to reduce importation and conserve reserves.
“We will provide intervention funds at single-digit interest rates for palm oil,” Emefiele said. Local manufacturers of textiles will also benefit from single-digit interest rates, the governor said.
Emefiele’s first five-year term ends in June and he may be replaced, according to people familiar with the matter.