The tightening of the Central Bank of Nigeria’s monetary policy has raised concerns from the World Bank that inflation may not be adequately controlled.
The organization stated in its Global Economic Prospects report, which was made public on Wednesday, that one of the major dangers to Nigeria’s economic growth is if these tightening measures fail to control inflation.
The World Bank said that there are significant risks to Nigeria’s growth forecast, including the chance that tighter monetary policy may not go far enough to control inflation.
Even with the CBN’s aggressive interest rate increases, the nation still faces a serious inflation problem.
After rising by 750 basis points in February, the monetary policy rate reached 26.25 percent in May.
The World Bank cautions that this might not be sufficient to solve the problem, though.
According to the analysis, Nigeria’s GDP would expand at a low rate this year, 3.3%, and 3.5% in 2025.
While the oil sector is anticipated to stabilize as output improves, the non-oil economy is predicted to rise steadily.
The World Bank also draws attention to sub-Saharan Africa’s public debt problem, which is predicted to worsen during the projection period.
“Debt-service costs for countries in the region may rise, increasing the risk of government debt distress,” it stated, if global interest rates stay high.