Bismarck Rewane Foresees Naira Strengthening in 2024 on the Back of Inflation Drop

At the heart of Rewane’s forecast is the anticipation of a significant drop in inflation, potentially reaching as low as 17 percent in 2025.

He emphasized the intrinsic relationship between declining inflation and an appreciating exchange rate, citing the slowdown in the exchange rate pass-through as inflation recedes.

Despite acknowledging the likelihood of continued inflationary pressures in the early part of the year due to market reforms and persistent currency volatility on the black market, Rewane expressed confidence that base effects would come into play by mid-year.

He predicted a moderation of inflation to an average of 23.6 percent in 2024, down from the 24.4 percent average observed in 2023.

The economic expert highlighted key factors contributing to the economic landscape, including a 26 percent depreciation of the Naira to N1,050/$ in 2023.

He pointed to higher energy prices, with diesel and fuel prices registering substantial increases year-on-year.

Also, the money supply experienced a notable 36 percent growth year-on-year, reaching N67.18 trillion in September.

Rewane underscored the interconnected nature of the global economy, emphasizing Nigeria’s vulnerability to international factors such as geopolitical events, trade dynamics, emerging market trends, and the influence of artificial intelligence (AI).

As the world embraces AI and rapid technological advancements, Rewane urged investors to focus on securities offering higher yields and companies with solid cash flows and realistic earnings goals.

In a notable piece of advice, he emphasized the importance of considering local investments before committing to a country, suggesting that indigenous investments could serve as a reliable indicator.

The economic session organized by Parthian Partners aimed to provide valuable insights and strategic guidance for businesses, investors, and policymakers navigating the economic landscape in the coming year.