Expert projects drop in March inflation figure

The Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, has projected that the inflation for March 2023 will drop marginally by 0.06 per cent to 21.85 per cent.

The National Bureau of Statistics pegged the inflation figure for February at 21.91 per cent and is set to release the figures for last month in a few days.

Rewane made his projection about the inflation figure during his presentation titled, ‘Global Tremor But No Contagion’ at the April Breakfast Meeting of the Lagos Business School.

In his presentation, Rewane said that “Inflation will likely fall marginally by 0.06 per cent to 21.85 per cent in March due to exchange rate appreciation, base effects and reduction in transportation costs.”

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The core inflation rate was projected at 18.54 per cent, a drop from 18.84 per cent that the NBS disclosed for February 2023, while food inflation was expected to drop to 23.83 per cent, from 24.35 per cent based on NBS February data. However, the monthly inflation rate was expected to remain flat at 1.71 per cent.

According to Rewane, inflation is largely driven by money supply growth, in this case, the integration of old and new naira notes to increase currency in circulation, the appreciation of the naira at the parallel market by 1.32 per cent to N745/ per dollar, also a significant decline had been recorded in diesel price, which dropped by 12.78 per cent to N710/per cent.

Meanwhile, Rewane stated that the collapse of Silicon Valley Bank and Signature Bank in the United States of America would squeeze funding for fintech startups in Nigeria.

He said, “The SVB is a major financier of tech startups and venture capital in the United States of America. The collapse of SVB and the Signature Bank crisis will squeeze and restrain funding to fintech startups in Nigeria. Nigeria’s fintech space is likely to come under pressure.”

The collapse of the US banks had led to massive sell-offs of global banking stocks as investor jitters sent the market into turmoil.

According to Bismarck, the total value of fintech start-up funding by Venture Capital jumped to $536.7mn in 2021 from $20.9mn in 2015 before declining to $507mn in 2022.