Oluwole Adelokun: Dangote Refinery Not A Silver Bullet For Inflation, Fuel Scarcity

Economist and Partner astatine KPMG West Africa, Oluwole Adelokun, has said that the planetary proviso concatenation headwinds person somewhat improved, starring to a forecasted maturation successful section commercialized by 2.4% this twelvemonth and 3.5% adjacent year.

Adelokun In an interrogation with Arise News,he said the planetary proviso concatenation headwinds has somewhat eased, paving the mode for a predicted maturation successful section trade.

Adelokun stated,”The crushed wherefore we noted that the headwinds has somewhat improved is due to the fact that the planetary dynamics that interaction the satellite successful 2023, based connected the planetary proviso chain, has continued to ease, and commercialized has begun to prime up.”

“According to the AIO report, section commercialized is forecasted to turn by 2.4% this twelvemonth and further fortify to 3.5% adjacent year, a important betterment from past year’s antagonistic maturation complaint of 0.9%,” helium said.

Adelokun besides predicted a downward inclination successful ostentation complaint by the extremity of the year, citing the basal effect and the Central Bank of Nigeria’s inflation-targeting policy.

“Our presumption is that arsenic you deliberation astir the macro situation and you constrictive down connected ostentation arsenic you spell towards the extremity of the year, the 2nd fractional into 3rd quarter, we should statesman to spot a downward trend, that’s our constituent of view,” helium said.

However, Adelokun noted that the depreciation successful speech complaint poses a important hazard to the outlook, with a pass-through effect connected businesses and households.

“If you look astatine our planetary outlook economical report, 1 of the things we noted precise intelligibly is that the biggest hazard to the outlook is the depreciation successful the speech rate.

“So we bash recognize and recognise that the depreciation successful speech complaint would person a pass-through effect connected businesses and households,”he said.

He said, the Dangote refinery, portion a strategical investment, is not a metallic slug for addressing ostentation and substance scarcity.

“The metallic slug is not the Dangote refinery, our presumption is that arsenic you look astatine the ostentation situation successful Nigeria the large constituent is the nutrient inflation.

“We presumption the Dangote refinery arsenic a strategical concern successful the close direction, but we judge its interaction connected prices volition beryllium limited.

“The refinery’s input, crude oil, is an planetary commodity traded extracurricular Nigeria’s control, truthful we don’t expect a important driblet successful goods and services prices.

“There whitethorn beryllium a flimsy reduction, akin to the 30-40% driblet seen erstwhile Dangote refinery’s diesel entered the market, but the refinery is not the metallic bullet.

“The main operator of ostentation successful Nigeria is nutrient inflation. To code prices, the authorities needs to tackle structural challenges impacting nutrient costs.

“The quality to dismantle the barriers that interaction proviso is really the solution to prices successful Nigeria.

“Government needs to beryllium strategical astir that, they request to instrumentality bold steps to woody with each the structural challenges impacting outgo of nutrient successful the country.

“While the Dangote refinery would assistance gain dollars and trim proscription costs, it’s not the eventual solution,” Adelokun said.

Adelokun concluded that the authorities needs to behaviour a elaborate worth concatenation investigation from accumulation to logistics and proscription to resoluteness the challenges regarding supply.

“To resoluteness proviso challenges, the authorities indispensable behaviour a elaborate worth concatenation analysis, from accumulation to input, packaging, processing, logistics, and transportation,”he said.

Boluwatife Enome

The station Oluwole Adelokun: Dangote Refinery Not A Silver Bullet For Inflation, Fuel Scarcity appeared archetypal connected Arise News.