Index to Nigerian Newspapers

The global tightening of developed economies, particularly as announced by the United States Federal Reserve System and other developed countries, has raised concerns about Nigeria's investment outlook. Nigeria's Monetary Policy Committee (MPC) is contemplating a higher interest rate, as the economy is believed to have achieved modest stability while inflation continues to raise concerns. This has sent jitters across markets with high-risk assets, with cryptocurrency losing in the first week of January for the first time since 2018. The Fed is also working towards unwinding its huge stimulus programme in March, which could trigger a massive outflow of assets from extremely risky markets, including Nigeria. Experts say the international debt market would be more expensive this year. The World Bank has warned of impending financial stress in emerging markets and developing economy (EMDE) regions due to tightening monetary measures. The International Monetary Fund (IMF) has called on policymakers to prepare for spillovers from the U.S. liquidity tightening, which it warned could hit vulnerable countries hard. A regression analysis suggests that capital flows to emerging markets would weaken as the dollar appreciates relative to other major currencies. The combination of slower growth and elevated vulnerabilities could create adverse feedback loops for such economies, as the IMF highlighted in its October releases of the World Economic Outlook and Global Financial Stability Report.

The global tightening of developed economies, particularly as announced by the United States Federal Reserve System and other developed countries, has raised concerns about Nigeria's investment outlook. Nigeria's Monetary Policy Committee (MPC) is contemplating a higher interest rate, as the economy is believed to have achieved modest stability while inflation continues to raise concerns. The interest rate hike will make the international debt market more expensive and servicing of existing dollar-denominated debts more challenging for political and corporate entities with huge exposures. The Federal Government has proposed to source N2.57 trillion from the international market and another N1.16 trillion from multilateral and bilateral loan drawdowns to finance the fiscal deficit. The World Bank has also released its January Global Economic Prospects. The International Monetary Fund (IMF) warned of impending financial stress in emerging markets and developing economy (EMDE) regions as tightened monetary measures could drive up debt refinancing and servicing costs and trigger capital outflows. It also noted that capital flows to emerging markets would weaken as the dollar appreciates relative to other major currencies. It listed possible financial system crises as a spillover of the U.S. tightening, urging policymakers to prepare for spillovers.