Rating agency August & Co. has released a scathing review of the management of the economy in the past eight years stating it was poorly managed.
This is according to its monthly Newsletter for January titled, “2024: A year of reckoning, turning points and balancing acts” where it made projections on different aspects of the economy ranging from foreign exchange to inflation, GDP growth etc.
While commenting on the need for a coordinated and fiscal policy response to the country’s economic woes, it stated that, unlike the previous administration, the current government will properly manage the economy.
It stated,
- “This alludes to the need for a coordinated monetary and fiscal policy response, and we believe that a strategic balance between economic policies and external factors will determine the trajectory of the Nigerian economy in 2024.
- The good news is that the Nigerian economy is unlikely to be as poorly managed in the next four years as it was in the previous eight.”
Food production
On food production, the rating agency noted that the discontinuation of intervention finance coupled with insecurity across the Middle-belt and North-west and increased tensions in the Niger Republic would gravely impact crop production this year.
The CBN has reiterated its decision to stop intervention finance programs such as the “Anchor borrowers’ program” stating that it’s beyond its core functions and lacks expertise in that area.
Beyond the official statement announcing an end to the program, the bank’s Governor Yemi Cardoso have at different fora defended the current policy differently.
Exchange and Interest rate
Augusto & Co also projected the exchange rate of the Naira to the USD to converge at N1100/$ on the official market at the end of 2024. Currently, the exchange rate trades at over N1400/$ to the USD on the official market
For the CBN’s decision on interest rates, the agency observed there the President’s stance on lower interest rates and currency macroeconomic environment which favours higher interest rates presents a litmus test on the bank’s independence.
The CBN will hold its first MPC meeting since July on the 26th and 27th of February where analysts have already predicted a hike in interest rates.
