South African inflation expectations for the next two years have shown a significant decline, indicating progress in the central bank’s efforts to manage inflation ahead of its policy meeting later this month.

According to a survey released on Friday by the Stellenbosch-based Bureau for Economic Research (BER), average inflation expectations two years ahead have dropped to 4.9% in the second quarter, down from 5.2% previously.

The South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) uses these expectations to guide its decision-making process.

The decline in expectations is a positive development for the central bank, which has been working to anchor inflation expectations at the midpoint of its 3% to 6% target range, specifically at 4.5%.

The MPC had expressed concerns at its last meeting that inflation expectations were consistently above this preferred level.

The latest reading, coupled with easing inflationary pressures, may pave the way for interest rates to be lowered later this year.

However, for the upcoming meeting on July 18, analysts anticipate that the MPC will maintain the key interest rate at 8.25% for the seventh consecutive meeting.

Governor Lesetja Kganyago has been cautious in declaring an end to the MPC’s inflation fight, emphasizing that rates will not be reduced until inflation is firmly anchored at 4.5%.

The survey results are seen as a positive signal that the central bank’s efforts are yielding results. The reduction in inflation expectations can be attributed to various factors, including stable food and energy prices, a stronger rand, and a disciplined monetary policy stance by the SARB.

Despite these encouraging signs, the MPC remains vigilant. The global economic environment remains uncertain, and domestic challenges, such as load shedding and structural economic issues, continue to pose risks to the inflation outlook.

For now, the SARB will likely adopt a wait-and-see approach, monitoring inflation trends and economic indicators closely.

The central bank’s commitment to maintaining price stability is crucial for fostering economic growth and protecting the purchasing power of South Africans.

As the MPC prepares for its upcoming meeting, the decline in inflation expectations offers a glimmer of hope that the central bank is on the right track.

However, the path to sustained low inflation remains complex and requires continued vigilance and prudent policy decisions.

The Senate has called on the Federal Government to enhance funding for the capital components of the national budgets, which are currently lagging behind.

This call was made during a session on Wednesday by the Chairman of the Senate Committee on Appropriation, Senator Solomon Adeola, who emphasized the importance of capital expenditure in showcasing the government’s performance and driving national development.

During the session, Senator Adeola expressed concerns over the inadequate funding of capital projects in the 2024 national budget.

He highlighted that only N1.84 billion out of the allocated N9 trillion capital expenditure had been utilized so far, a figure he described as “nothing to write home about.”

“It is the capital component of the budgets that will showcase this government largely in terms of performances,” Senator Adeola said. “The capital components tend to showcase various projects that will be executed by this government, and people can say the government is doing this, it’s doing that. That is why we are emphasizing the performance of the 2024 capital component of the project.”

The committee session featured appearances by the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, and the Accountant-General of the Federation, Oluwatoyin Madein, who were invited to discuss the performance of the budgets.

Adeola urged the Finance Minister to engage more with the Ministries, Departments, and Agencies (MDAs) to ensure they are aware of the current funding arrangements and to accelerate the release of funds for capital projects.

The Senate also plans to organize a public hearing on the Nigerian National Petroleum Company Limited (NNPC), inviting stakeholders from the oil and gas sector, including the Finance Minister, to discuss the corporation’s financial operations and strategies.

Despite the challenges in funding capital projects, Adeola commended the Finance Minister for achieving 100% funding for the 2023 supplementary budget.

However, he stressed the need for consistent updates and periodic reports on the implementation levels of these projects to ensure transparency and accountability.

In response, Minister Edun acknowledged the Senate’s concerns and pledged to intensify efforts in monitoring revenue-generating agencies and improving the funding of capital projects.

He also provided updates on the Federal Government’s ongoing forensic investigation into the N30 trillion Ways and Means, aimed at scrutinizing past financial practices to enhance future fiscal responsibility.

Edun highlighted the challenges faced in the procurement of electric and Compressed Natural Gas (CNG) vehicles due to a spike in freight costs, but reassured that efforts were being made to address these issues.

“We are also interrogating the N22.7 trillion that we met on the ground. We instituted a forensic audit to see the impact. We are also interrogating the revenues that are due to us from everybody because we need to,” Edun said.

The Senate’s call for increased capital budget funding underscores the critical role of capital expenditure in national development, infrastructure improvement, and public service delivery.

In a bold move to propel Nigeria towards a $1 trillion economy by 2030, the federal government has launched an ambitious initiative aimed at establishing an operating model and framework for economic and financial inclusion.

This initiative, announced on Wednesday, underscores the administration’s commitment to combating poverty and driving sustainable economic growth from the ground up.

Vice President Kashim Shettima, speaking during the kickoff meeting for the initiative, highlighted its significance as a core component of President Bola Ahmed Tinubu’s Renewed Hope Agenda.

The Vice President emphasized that this project symbolizes the administration’s dedication to enhancing financial and economic inclusion across Nigeria.

“This initiative represents our unwavering commitment to providing universal access to financial services and creating a broad-based prosperity that will lift millions out of poverty,” Shettima said. “At the heart of every strategy championed by President Tinubu, there has been a need to prioritize inclusive economic growth and development.”

The launch of the Aso Accord on Economic and Financial Inclusion on April 25, 2024, laid the groundwork for this multi-faceted blueprint.

The accord aims to achieve universal access to financial services, addressing both economic and security challenges through inclusive growth.

Vice President Shettima noted several positive outcomes from the administration’s efforts, including the recent upgrade of Nigeria’s credit outlook to positive by Fitch Ratings.

This upgrade reflects growing confidence in Nigeria’s economic trajectory and the progress of policy reforms aimed at easing the country’s debt service burden.

“While such an upgrade by a distinguished institution reflects growing confidence in our economic trajectory, particularly in light of policy changes aimed at easing our debt service burden, we remain mindful of the short-term impacts of these reforms,” Shettima said.

“Hence, we are prioritizing measures to mitigate immediate effects, from the Student Loan Act, which democratizes access to education, to the relentless efforts of the Federal Ministry of Agriculture and Food Security in combating food insecurity.”

The Vice President stressed that the approach to inclusive growth must be strategic and sustainable, hence the elevation of economic and financial inclusion to the agenda of the National Economic Council (NEC).

This body includes governors from all 36 states and the FCT minister, who participate in crucial policy deliberations alongside other stakeholders.

“You have been entrusted with a vital national assignment, and I have full confidence that you will bring your best efforts to ensure its success,” Shettima told the implementation team.

“As we embark on this essential initiative, I call upon each of you to contribute your insights, expertise, and dedication. Only through such resolve and discipline can we forge a robust operating model that will drive economic and financial inclusion across our nation, ensuring every Nigerian has the opportunity to thrive.”

Technical Advisor to the President on Financial Inclusion, Dr. Nurudeen Abubakar Zauro, reported substantial progress in implementing the Aso Accord on financial inclusion.

The initiative has garnered support and funding from notable organizations, including the Bill & Melinda Gates Foundation through the Lagos Business School.

Dr. Zauro detailed the ongoing efforts to set up the operating model and legal framework to ensure the project’s smooth takeoff and alignment with the Renewed Hope Agenda.

The team includes Augmentum Advisory, Banwo & Ighodalo, and Ndarani (SAN) & CO. He also highlighted plans for capacity-building initiatives and high-profile training for permanent secretaries and finance commissioners to enhance practical knowledge of financial inclusion.

Prof. Olayinka David-West, Project Manager at the Lagos Business School, commended the administration for prioritizing economic and financial inclusion.

She noted that the initiative aims to establish a legal framework and national coordination to drive ownership and successful implementation across the country.

The project seeks to galvanize relevant authorities and stakeholders to key into the initiative, creating a robust platform for inclusive economic growth that will transform Nigeria into a $1 trillion economy by 2030.