President of Association of Bureaux De Change Operators of Nigeria (ABCON), Alhaji (Dr) Aminu Gwadabe, has said the volatility amid foreign exchange interventions by the Central Bank of Nigeria (CBN) has been compounded by rising inflation, interest rate hike and slow economic growth with consequences for middle- and low-income earners.
Speaking in Lagos at the weekend, Gwadabe said the unfolding scenarios raise the risk of stagflation with potentially harmful consequences for the poor within the economy. He said that already, global growth is expected to slump from 5.7 per cent in 2021 to 2.9 per cent in 2022— significantly lower than 4.1 per cent predicted by the International Monetary Fund (IMF) in January.
To keep the Nigerian economy going strong in the face of these challenges, Gwadabe called for improved local production and diversification of the economy away from oil.
He said the naira exchanges at N614/$1 at the parallel market, dollar bids continues to rise as inflation rose to11-month high (17.71 per cent) in May. These develoments, the ABCON boss said, are eroding the purchasing power of households.
“The biggest driver of inflation is the stubborn rise in food inflation. The average price level of the food basket rose by 1.13 per cent to 19.50 per cent in May from 18.37 per cent in April. This can be reversed by increased support for agriculture and government policies that support the sector,” he said.
Gwadabe said Nigeria’s huge population and diaspora market, which attracts average of $20 billion annually can be explored to deepen dollar inflows to the economy.