High inflation, weak naira may slow down economic growth – CITN

High inflation, naira weakness and policy tightening may threaten economic growth in the year 2024, the Chartered Institute of Taxation of Nigeria (CITN) has observed.

The President of the CITN, Samuel Agbeluyi, spoke at the 32nd Annual General Meeting of the institute in Lagos, where he revealed their activities in the last one year. 

Analysing the domestic economy, Agbeluyi noted that Nigeria was navigating through a blend of policy reforms introduced by the new administration in 2023.

He said reforms like the fuel subsidy removal and exchange rate harmonisation “had a significant impact on Nigeria’s economic trajectory for the year.”

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He said, “The Nigerian naira depreciated 51.6 per cent against the dollar which resulted in volatile exchange rates affecting the cost of imports, disrupting trade balances and contributing to economic uncertainty and heightened inflation which closed at 28.9 per cent in 2023, with food, energy and transportation costs being the most impacted.

“Despite the array of macroeconomic challenges, there are promising indications that Nigeria’s macroeconomic situation is poised for improvement. Economic growth strengthened in the fourth quarter of 2023, with GDP growth reaching 2.8 per cent. This, however, falls slightly short of population growth dynamics. Fiscal sustainability concerns remain slightly elevated given debt servicing costs (89 per cent) of the budgeted fiscal deficit is to be financed by new borrowings.

“Improved oil production and an expected better harvest in the second half of the year are positive for 2024 GDP growth, which is projected to reach 3.2 per cent, although high inflation, naira weakness and policy tightening may cause constraints to growth.”

He noted that the institute grew “appreciably during this presidential year,” adding that a total of 1,057 new members were inducted in December, 2023, and another 605 members inducted in the 50th induction held in April, 2024.

Also, within the period under review, 475 associates were upgraded to fellows while 127 members were issued practicing licence in November, 2023, and a total of 83 in March, 2024.