Mr. Lukman Otunuga, a research analyst at FXTM, has said that the Economic Recovery and Growth Plan (ERGP), developed by President Muhammadu Buhari’s government, can achieve its 2017 inflation targets if the country’s foreign exchange policy is fixed.
The ERGP sets a target of 15.74 per cent inflation by the end of 2017, as against 18.55 per cent in 2016.
“The rising confidence towards Nigeria’s economic recovery was boosted on Tuesday following reports of the nation’s inflation declining for the first time in 15 months at 17.78 per cent in February,” Otunuga said.
“This encouraging sign of returning price stability could boost investor sentiment as the nation tackles a fierce currency crisis and dollar shortages.
“With the recent increase in dollar sales to importers boosting the naira further on the black market exchange, the closing disparity between the black market and official exchange could quell the cost-push inflation scenario consequently reducing inflationary pressures.
“It must be kept in mind that Nigeria remains on a quest to achieving economic sustainability and such may become a reality if the current upside momentum holds.
“If inflation continues to recede this year as the nation attains economic stability and bridges the disparity between the exchanges, then the 15.74 per cent forecasted year-end figure could edge closer to reality.”
The ERGP was released by Vice President Yemi Osinbajo and the Ministry of Budget and National Planning a few days before the president returned to the country. The ambitious plan seeks to cut inflation in Nigeria to single digit by 2020.
The Central Bank of Nigeria (CBN) has been taking drastic measures to close the gap between the parallel and official side of the forex market, with some successes recorded.