Nigeria’s declining economic activities worrisome – CBN

The Central Bank of Nigeria Concerned About Declining Economic Activities

The Central Bank of Nigeria (CBN) has expressed worries over the declining economic activities in the country. This concern was raised by the CBN Deputy Governor of Corporate Services, Bala Moh’d Bello, in his personal statement at the end of the last Monetary Policy Committee (MPC) meeting released on the Banks’ website on Tuesday.

Composite Purchasing Managers’ Index (PMI) Declines

Bello noted that Nigeria’s Composite Purchasing Managers’ Index (PMI) declined sharply to 39.2 index points in February 2024 from 48.5 index points in the previous month. This decline in economic activity has been ongoing for eight months and is primarily attributed to exchange rate pressures, inflation, and security challenges.

Inflationary Trend and Rising Inflation

Bello expressed concern over the rising inflationary trend despite sustained hikes in the monetary policy rate. He stated that both food and core inflation rose in February 2024, leading to an acceleration in headline inflation to 31.70 per cent from 29.90 per cent in the previous month. The continued rise in inflation is mainly attributed to high production costs, lingering security challenges, and exchange rate pressures.

Furthermore, Bello highlighted that the country’s inflation soared to 33.22 per cent in March, which is considered unacceptably high. He emphasized the need for decisive and coordinated efforts to curb inflation due to its adverse impact on citizens’ purchasing power, investment decisions, and overall output performance.

Sustainable Development Goals (SDGs)

The Central Bank of Nigeria recognizes the importance of addressing economic challenges in line with the Sustainable Development Goals (SDGs). The initiatives implemented by the Federal Government to address food insecurity, such as releasing grains from strategic reserves, distributing seeds and fertilizers, and supporting dry season farming, are commendable and contribute to achieving SDG 2: Zero Hunger.

Conclusion

The declining economic activities in Nigeria, coupled with rising inflation, pose significant challenges to the country’s development. It is crucial for policymakers to make well-nuanced decisions targeted at price stability to stimulate economic activities and ensure sustained output performance. Coordinated efforts are required to curb inflation and mitigate its adverse effects on citizens’ purchasing power and investment decisions. By aligning with the SDGs, Nigeria can work towards achieving sustainable and inclusive economic growth.

1. Introduction
2. Composite Purchasing Managers’ Index (PMI) Declines
   • February 2024: 39.2 index points
   • Previous month: 48.5 index points
3. Inflationary Trend and Rising Inflation
   • February 2024: Headline inflation at 31.70%
   • Previous month: Headline inflation at 29.90%
   • Main factors: high production costs, security challenges, and exchange rate pressures
4. Sustainable Development Goals (SDGs)
   • SDG 2: Zero Hunger
   • Initiatives addressing food insecurity:
     1. Releasing grains from strategic reserves
     2. Distributing seeds and fertilizers
     3. Supporting dry season farming
5. Conclusion

SDGs, Targets, and Indicators in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

SDG 8: Decent Work and Economic Growth

The article highlights the declining economic activities in Nigeria, which is directly connected to SDG 8, which aims to promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all.

SDG 1: No Poverty

The article mentions the rising inflationary trend and its adverse impact on citizens’ purchasing power, which is connected to SDG 1, which aims to end poverty in all its forms everywhere.

SDG 2: Zero Hunger

The article acknowledges the Federal Government’s initiatives addressing food insecurity, such as releasing grains from strategic reserves, distributing seeds and fertilizers, and supporting dry season farming. This is connected to SDG 2, which aims to end hunger, achieve food security and improved nutrition, and promote sustainable agriculture.

2. What specific targets under those SDGs can be identified based on the article’s content?

Target 8.1: Sustain per capita economic growth

The article mentions the decline in the Composite Purchasing Managers’ Index (PMI), which indicates a contraction in economic activity. This relates to Target 8.1, which focuses on sustaining per capita economic growth.

Target 8.2: Achieve higher levels of economic productivity

The article highlights the rising inflationary trend, which affects economic productivity. This aligns with Target 8.2, which aims to achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.

Target 8.3: Promote policies that support productive activities, decent job creation, entrepreneurship, and innovation

The article mentions the need for well-nuanced policy decisions targeted at price stability to prevent stifling economic activities. This relates to Target 8.3, which focuses on promoting policies that support productive activities, decent job creation, entrepreneurship, and innovation.

Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors

The article discusses the adverse impact of high inflation on citizens’ purchasing power, which connects to Target 1.3, which aims to implement social protection systems and measures to address poverty and inequality.

Target 2.1: End hunger and ensure access by all people to safe, nutritious, and sufficient food all year round

The article acknowledges the Federal Government’s initiatives addressing food insecurity, which align with Target 2.1, which aims to end hunger and ensure access to safe and nutritious food for all.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article mentions several indicators that can be used to measure progress towards the identified targets:
– Composite Purchasing Managers’ Index (PMI): This indicator measures economic activity and can be used to assess progress towards sustaining per capita economic growth (Target 8.1).
– Inflation rate: The article highlights the rising inflationary trend, which can be used as an indicator to measure progress towards achieving higher levels of economic productivity (Target 8.2) and implementing social protection systems (Target 1.3).
– Monetary policy rate: The article mentions sustained hikes in the monetary policy rate, which can be used as an indicator to measure progress towards promoting policies that support productive activities (Target 8.3).

4. Table: SDGs, Targets, and Indicators