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African Economies At Risk Of Stagflation -UN
The United Nations have disclosed that the scarcity of currency in recent times have crippled the economy, particularly affecting the informal sector.
According to the UN Conference on Trade and Development’s ‘Trade and Development Report Update; Global Trends and Prospects (April 2023),’ the decline in oil production is also set to impact the country’s finances in 2023.
The UN report highlights that many African economies, including Nigeria, are at risk of stagflation in 2023, with half of African countries recording double-digit inflation in early 2023.
Weaker external demand and tighter financial conditions have contributed to this situation, according to the UN. Many African countries are also facing public debt levels not seen since the early 2000s.
UNCTAD said, “In Nigeria, a shortage of cash, triggered by the replacement of the highest denominations of the country’s currency, hobbled the economy, especially the informal sector.
“Meanwhile, the continuing decline of oil production, accompanied by large-scale oil theft, poses a main threat to strained finances in Africa’s most populous nation.
“In many instances, these recent inflation spikes relate to the continuing depreciation of several African currencies in early 2023 – often following a loss in 2022 of 10–30 per cent of their value vis-à-vis the dollar.
“Public debt, in many cases standing at levels not seen since the early 2000s, is another worry across the continent. Out of the 38 African countries that are part of the Debt Sustainability Framework of IMF and World Bank, 8 entities are already ‘in debt distress’, while 13 are considered ‘at high risk’ of distress.” it highlighted.
The UN raised concerns that many African economies are approaching a maturity wall as maturities on international bonds issued in the previous decade peaks in 2024 and will remain elevated for the next decade, with most governments unable to tap international capital markets to roll over maturing debts.
“Overall, risks remain tilted to the downside. The rising domestic cost of living and a deteriorating security situation remain of a key concern in many parts of the continent. More than 116 million African people are currently in acute food insecurity according to the latest projections of WFP and FAO.” the agency added.
However, the UN has revealed that the Nigerian economy will grow by three per cent in 2023 due to its commodities trade and consumer goods and services markets.
While this is positive news, the UN has cautioned that risks remain tilted to the downside, with a rising domestic cost of living and a deteriorating security situation remaining a key concern in many parts of the continent.
The Nigerian Economic Summit Group (NESG) has projected that the country has the potential to achieve a 5.5% growth in Gross Domestic Product (GDP) if critical policy reforms are sustained.
This was disclosed on Thursday during the launch of the NESG’s 2025 Macroeconomic Outlook report.
Speaking at the event, the Chief Economist and Director of Research & Development at NESG, Dr. Olusegun Omisakin, highlighted the need for more efficient policy implementation to unlock Nigeria’s economic potential.
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“We believe at the optimal level, if we embark on more efficient policy reforms, the Nigerian economy has the potential, the GDP to end up at 5.5 per cent, and we believe that this is achievable,” Omisakin stated.
More to follow……….
The Central Bank of Nigeria (CBN) has announced the release of the Nigerian Foreign Exchange (FX) Code, a set of guidelines designed to promote ethical conduct among authorized dealers in the country’s FX market.
In a statement, the apex bank disclosed that the official launch of the Code would take place on Tuesday, January 28, 2025, at the CBN Head Office Auditorium in Abuja.
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“The Central Bank of Nigeria has approved the release of the Nigerian Foreign Exchange (FX) Code as a guideline to the banking industry to promote the ethical conduct of authorised dealers in the Nigerian Foreign Exchange Market,” the statement read.
The introduction of the FX Code is expected to enhance transparency, accountability, and professionalism within Nigeria’s foreign exchange ecosystem, aligning it with global best practices.
The event is anticipated to attract key stakeholders in the financial and banking sectors, as well as representatives from authorized FX-dealing institutions across the country.
The 47th President of the United States, Donald Trump attracted up 3 trillion dollars in investments into the country’s economy in his first full day at work.
This was gleaned from the verified handle of the POTUS on micro-blogging site, X, on Wednesday.
Biztellers reports that the POTUS is focused ensuring at least $1 trillion investment daily for the first seven days of his return to the White House, which would be driven by key clearly identified areas, including artificial intelligence.
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President Trump wrote, “In total, before the end of my first full business day in Washington and the White House, we’ve already secured nearly $3 trillion of new investments in the United States.
“And probably, that’s going to be six or seven by the end of the week.”
In a short video clip accompanying the statement, President Trump assured that the surge in investments would likely hit $7 trillion within his first seven days as the 47th POTUS.
He highlighted that artificial intelligence had proven to be an area lots of willing entrepreneurs had shown much appetite for.
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