‘Tinubu’s reforms may double GDP growth next year’ — CBN deputy governor counters KPMG Nigeria

Kingsley Obiora, the deputy governor of the Central Bank of Nigeria, says the policies being implemented by President Bola Tinubu may double the country’s economic growth from 3 percent next year.

Obiora spoke on Monday in an interview with Bloomberg.

In his inaugural speech on May 29, President Bola Tinubu set a target to increase the gross domestic product (GDP) growth rate of the country by 6 percent (on average) in the next four years through budgetary reforms aimed at stimulating the real sector of the economy.

On June 9, a report by KPMG Nigeria said the target “seems overly ambitious” and may be difficult to achieve.

But expressing his optimism during the interview, Obiora insisted that the growth rate was possible.

“Reforms being implemented by President Bola Tinubu may result in economic growth rate doubling next year from about 3 percent this year,” the deputy governor said.

“From next year, when this president will have his own budget, his own policies will be fully on track, I completely expect us to do 5 percent to 6 percent next year.

On June 14, the CBN announced the unification of all segments of Nigeria’s FX market, and the floating of the local currency.

The policy effectively collapsed all FX windows into the investors and exporters (I&E) window.

Similarly, on Sunday, the regulator cancelled cash deposit restrictions on domiciliary accounts, thereby allowing customers to “have unfettered and unrestricted access to funds in their accounts”.

The decision aims to promote transparency, liquidity, and price discovery in the FX market in order to improve FX supply.

Obiora said the central bank plans to implement more reforms in the next couple of weeks to reposition the local currency.

The deputy governor said the foreign exchange market is already operating on a willing buyer, willing seller basis; stressing that the central bank “has not entered the market as a buyer or seller”.

“We are allowing the market itself to set a price,” he said.

“The central bank expects official and parallel-market exchange rates to converge soon. I don’t think it will take a long time for that to happen”