The domestic macroeconomic narrative did not change much in 2022, given the government’s lack of will to institute the necessary reforms to propel the economy forward. While domestic economic activities appear more resilient than envisaged, inflationary pressures remain entrenched, pressuring consumer wallets. Similarly, FX pressures persisted, and foreign investments remained frail. In the words of the World Bank, “amid heightened risks, the government has kept a ‘business-as-usual’ policy stance that hinders prospects for economic growth and job creation”. Amidst all these, the socio-economic conditions worsened, with 63.0% (or 113.00 million) of the population living in multidimensional poverty, according to the National Bureau of Statistics (NBS). At the same time, the unemployment rate remains high, exacerbated by an unfriendly business environment. 

Although the Russia-Ukraine conflict compounded the domestic inflation woes, we highlight that price pressures were also self-inflicted in the form of policy distortions such as (1) trade restrictions, (2) lack of flexible FX framework, and (3) insincere monetary policy actions. On (3), the CBN continues to increase the key policy rate but maintains its monetary financing of the FGN’s fiscal deficits and credit intervention programs.