Augusto Makes Predictions on Naira Exchange Rate, Inflation, Nigeria’s Economic Growth in 2023

• A new report from a renowned credit agency has made some interesting predictions on key issues
• The prediction includes the naira-to-dollar exchange rate, economic growth, and inflation rate.
• There were also optimistic comments on Nigeria's oil production and price projection for 2023.

The Pan-African credit rating firm Agusto & Co has made some interesting projections regarding the Nigerian economy for 2023.

The agency’s projections were contained in its recently released report titled ‘2023 Outlook: Nigeria, a Nation on the Precipice’.

Details in the report projected a three percent economic growth for Nigeria in 2023 which is higher than the 2.9 percent growth estimated by the World Bank but lower than the International Monetary Fund (IMF’s) 3.2 percent.

Agusto & Co growth prediction for Nigeria was premised at the expected spending during the general elections.

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The report reads:

"Agusto & Co has a somewhat more optimistic prediction of 3%, believing that GDP growth would be bolstered by election expenditure, higher oil output (to 1.3-1.4mbpd), and still high oil prices ($88pb), but will be restrained by poor investment and productivity."

"How quickly Nigeria can stop massive oil theft and vandalism would be vital to raising foreign currency revenues and giving the CBN with enough firepower to increase its interventions in the FX market.

"Yet, we anticipate that in 2023, high global interest rates will continue to constrain capital inflows and add to currency pressures."

Security issues

According to the agency, Nigeria's insecurity problem would remain a big issue in 2023.

It stated that the problem would need a two-pronged strategy, devoting resources to military artillery, troops, and intelligence while also resolving the more deep-seated issues of widespread poverty, high unemployment, and excessive inequality, according to Punch.

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Naira prediction for 2022

In the report also, Agusto said that all three leading presidential candidates, on the surface, appear willing to ‘allow’ for a more market-determined exchange rate.

It said a successful election would ease frayed nerves and bolster investor confidence.

The agency forecasted a gradual downward adjustment of the official exchange rate to N480-N500/$ and a simultaneous increase in FX supply, which would signal a willingness to shift ground and would likely trigger an appreciation of the naira in the parallel market to N650-N680/$.

CBN opens portal for deposit of old naira notes

In a similar report, the Central Bank of Nigeria has launched a website for Nigerians to apply to deposit old naira notes.

The portal is to help Nigerians who still have the old N500 and N1000 notes not to lose their money.

The federal government and CBN have insisted that commercial banks will no longer collect the now-outdated notes.

Source: Legit.ng