By Chinwendu Obienyi
The Nigerian economy may fare slightly better than it did in 2021 only if oil prices are favourable, the Federal Government pays attention to the insecurity, foreign exchange policy and real GDP grows by 4 per cent.
Research, Credit ratings and Credit risk management company, Agusto&Co, stated this in its economic outlook for Nigeria in 2022 while adding that mandatory Cash Reserve Requirement (CRR) of banks stood at 35 per cent of local currency (LCY) deposits.
According to its 2022 economic outlook report, oil and gas export revenues should be around $50 billion in 2022 at a production rate of 1.8mbpd and an average price of $75 per barrel and it is very unlikely that the Central Bank of Nigeria (CBN) will change its exchange rate management strategy in 2022.
The report went on to project that a parallel market premium of around 40 per cent on the official exchange rate will continue to exist while noting that foreign investors will be wary of bringing in new money at the official rate which will then result into a not-so-sizeable net foreign investment inflow into Nigeria.
The report said, “It is unlikely that the CBN will allow a significant currency depreciation in an election year and one in which oil and gas export revenue is likely to rise by about 15 per cent. Therefore, we believe that the official Naira/Dollar exchange rate will be about N430/$1 at the end of 2022.
Our most aggressive estimate of FG’s revenue in 2022 is about N5 trillion and this means that the government will need to borrow about N8 trillion in order to finance aggregate spending of N13 trillion. We estimate that the FG will borrow $5 billion (N2.1 trillion) in 2022 and the rest will be local borrowings”.