Economy
Inflation and Omicron will dent world growth in 2022, says IMF
The International Monetary Fund has sharply cut its growth forecast for 2022 with a warning that higher-than-expected inflation and the Omicron variant have worsened the outlook for the global economy.
In a quarterly update to predictions made in October 2021, the IMF said it anticipated growth of 4.4% this year – down 0.5 percentage points – and emphasised the risks were of weaker performance.
Gita Gopinath, the IMF’s economic counsellor, said that as a result of Covid-19 the global economy would be $13.8t smaller by 2024 than it would have been having its pre-pandemic trend continued.
The Washington-based organisation blamed the downgrade on rising cost pressures and the rapid spread of Omicron, and said while the 2022 outlook was markedly worse for the world’s two biggest economies – the US and China – few countries would be spared a slowdown.
The UK is expected to grow by 4.7% in 2022, a cut of 0.3 points to the IMF’s forecast in its October 2021 World Economic Outlook.
Despite the reduction, the IMF anticipates the UK growing faster this year than the other six members of the G7 industrial nations – the US, Japan, Germany, France, Italy and Canada.
Gopinath said there was a case for the government providing “well-targeted support to highly vulnerable” UK households facing rocketing energy bills this spring.
After recent stock market volatility, Gopinath said she would expect to see corrections in share prices as global interest rates went up this year, but said there should be “orderly” provided central banks communicated the thinking behind their decisions.
An escalation of the tension between Russia and Ukraine would give an added twist to already high global energy costs, she predicted.
In its updated WEO, the IMF said bottlenecks had shaved between 0.5% and 1% off global growth in 2021.
“Meanwhile, inflation has been higher and more broad-based than anticipated, particularly in the US. Adding to these pressures, the retrenchment in China’s real estate sector appears to be more drawn out, and the recovery in private consumption is weaker than previously expected.”
The IMF publishes its world economic outlook each April and October, with updates in January and July. After pencilling in 2022 world growth of almost 5% in October, it has now cut its baseline forecast for every G7 country apart from Japan.
The biggest downgrade has been to the US – where the IMF’s growth forecast has been shaved by 1.2 points to 4%, but there were also cuts of 0.8 points for Germany and Canada, and 0.4 points for France and Italy.
China’s growth forecast has been reduced by 0.8 points to 4.8%.
“Risks to the global baseline are tilted to the downside,” the IMF said.
“The emergence of new Covid-19 variants could prolong the pandemic and induce renewed economic disruptions. Moreover, supply chain disruptions, energy price volatility, and localised wage pressures mean uncertainty around inflation and policy paths is high.”
–Guardian UK
The equities market opened the week lower on Monday, as indices dipped by 0.25 per cent due to profit-taking in medium and large-capitalised stocks.
Market capitalisation fell by N246 billion, or 0.25 per cent, closing at N97.582 trillion, compared with Friday’s N97.828 trillion.
Similarly, the All-Share Index lost 387.35 points, or 0.25 per cent, settling at 153,739.11.
Consequently, the year-to-date return declined to 49.37 per cent.
Market breadth closed negative, with 38 losers against 19 gainers.
Honeywell Flour Mill led the losers’ chart, dropping 10 per cent to N18 per share.
Northern Nigeria Flour Mills fell by 9.98 per cent, closing at N84.30, while Aradel Holdings declined 9.21 per cent to N710.
Ja Paul Gold dropped 7.95 per cent to N2.20, and Ikeja Hotel shed 7.71 per cent to close at N17.35.
Conversely, Union Dicon Salt topped the gainers’ table, rising 9.93 per cent to N7.75.
Omatek Ventures appreciated 9.92 per cent to N1.33, while NAHCO advanced 7.62 per cent to N113.
International Breweries gained 6.35 per cent to N13.40, and Champion Breweries rose 6.33 per cent to N15.95.
The market analysis showed increased deals, but lower value and volume, with 627.5 million shares worth N25 billion traded in 36,425 deals.
This contrasts with 5.2 billion shares valued at N45.2 billion exchanged in 30,598 deals on Friday.
United Bank for Africa recorded the highest volume and value, trading 136.84 million shares worth N5.54 billion.
Aso Savings and Loans followed with 108.94 million shares valued at N120.4 million, while Access Holdings traded 68.2 million shares worth N1.62 billion.
GTCO exchanged 49.8 million shares valued at N4.55 billion, and Zenith Bank transacted 31.8 million shares worth N2 billion.
Sen. Francis Fadahunsi, Chairman, Senate Committee on Industry, has expressed dismay over the low patronage of made-in-Nigeria automobiles by the federal and state governments in the country.
Fadahunsi made the observation when the committee members visited Anambra Motor Manufacturing Company (ANAMMCO) in Enugu on Friday.
The chairman said they found out from the visit that there was a lot of potential that was being wasted in Innoson Motors and ANAMMCO because of non-patronage of the federal and state governments.
According to him, if the federal and state governments are patronising our indigenous vehicle assemblers, manufacturers and CNG buses, Nigeria will be a better place instead of wasting our money and foreign resources to import vehicles.
“What we have seen in Enugu and Anambra is in line with the President’s New Hope Agenda. There are no types of buses that the government is looking for that these local assemblers and manufacturers cannot produce.”
“What they need is a legal backing and funds from the same federal government that established them to carry on.”
“Their foreign partners are physically present imparting technical knowledge on them, and before next year, you will see that Nigerian-manufactured vehicles are everywhere,” he said.
He called on Ministries, Departments and Agencies to patronise made in Nigeria vehicles, adding that in buying them, they would be reinvesting in the economy and creating jobs for unemployed youths.
Fadahunsi also said that the Senate Committee would convince their colleagues to start patronising vehicles produced in Nigeria and assist in enacting bills to make them thrive.
Mr Oluwemimo Osanipin, Director-General of the National Automotive Design and Development Council (NADDC), commended the committee for the oversight function, adding that the automobile sector had the capacity to generate a lot of multiplier effects in the economy.
He tasked governments with policies that would encourage the buying of local manufactured goods and stimulate demand, which also allowed individuals to buy.
“That is why the government is pushing for a credit scheme through credit cards and legislation that will promote investment in the auto sector.”
“So the legislation has been looked into, and this will equip the legislators to know when to come in and appreciate the need for that bill to be passed faster,” he said.
Osanipin added that the committee’s visit would offer them the opportunity to identify the challenges of auto operators and areas needing support.
The Chief Operating Officer of ANAMMCO, Mr Bennett Ejindu, described the visit as a “positive development”, saying it underscored the importance the President Bola Tinubu administration and Senate attached to industrial development.
Ejindu recalled that ANAMMCO was set up in the 1970s, saying, “It gives me a kind of hope that the authorities within Nigeria, both those making laws and those executing them, are interested in reviving automotive manufacturing in Nigeria”.
He stated that the abandonment of the industry between 1970 and 1986 made the world think that Nigeria was not serious about developing the automotive industry.
The operating officer added that governments could also assist in resurrecting the industry through direct involvement and the creation of an enabling environment for the industry to thrive.
“But with the interest that we are seeing now from the government, it gives us a kind of hope that things will turn around. This firm has the potential to manufacture vehicles for Nigerians,” he said.
Listing infrastructure as the major challenge of automobile companies in Nigeria, Ejindu called for the passage of the National Automotive Industry Development Policy (NAIDP) bill to build investors’ confidence in the country’s automobile industry.
Manufacturers Association of Nigeria (MAN) saw an increase in confidence among its CEO members in the third quarter of 2025, rising by 0.4 per cent to 50.7 from 50.3 in the previous quarter.
The President of MAN, Mr Francis Meshioye, revealed this on Tuesday in Lagos during a news conference detailing the MAN Chief Executive Officers’ Confidence Index (MCCI) and report from the 2025 MAN Think Tank Session.
The MCCI is a statistical indicator that measures the manufacturing sector’s pulse.
It does it by sampling the real-time perception of 500 CEOs of MAN member-companies across 10 sectoral groups and 16 industrial zones.
The index essentially gauges manufacturers’ perception using a set of diffusion factors, macroeconomic conditions and business operating environment indicators.
Meshioye said that over the years, manufacturing performance had been largely oscillatory due to some binding constraints.
“The association has also continually intensified advocacy for a friendlier operating environment.”
“While there is an uptick in CEOs’ confidence, real output growth dropped from 1.69 per cent to 1.6 per cent in Q2.”
“This contributes a modest 7.81 per cent to Gross Domestic Product (GDP), down from 9.62 per cent,” he said.
The MAN president said that, though the lower alternative energy cost of N676.6 billion and raw material import of N1.72 trillion in the first half of 2025 remained a heavy burden.
He added that high average lending rates of 36.6 per cent, a reduction in credit access to N7.72 trillion and rising unsold inventories of N1.04 trillion continued to limit the sector’s performance.
“Overall, the sector’s fragile recovery calls for urgent policy actions to cut energy costs, strengthen foreign exchange liquidity and expand affordable credit access to accelerate growth.”
“It is noteworthy to state that the manufacturing sector is gradually inching toward the path of full recovery.”
“However, government, as a matter of urgency, needs to review reforms implemented so far to ascertain lapses, internal bottlenecks and drawbacks and with a view to addressing them,” he said.
MAN Director-General, Mr Segun Ajayi-Kadir, said the 0.4 per cent rise, though marginal, was significant, as it marked a second consecutive quarterly increase, reflecting improving manufacturer confidence.
He said the breakdown of the MCCI indices showed that both the current business condition and current employment condition recorded slight upticks of 0.6 and 0.3 per cent, respectively.
Ajayi-Kadri, however, noted that the current production condition declined marginally by 0.3 points.
This, he attributed, to the industrial disputes in the oil and gas sector, which disrupted gas supply, raised energy costs and constrained manufacturing output.
He said that the projected indices for the next quarter all remained above 50 per cent, showing sustained optimism among manufacturers.
“This optimism is buoyed, not only by recent policy adjustments, such as the 50-basis point cut in the benchmark interest rate.”
“Also, the suspension of the four per cent Free-on-Board levy and the approval of tax incentives for local sourcing of raw materials.”
“However, it is by strong expectations that the forthcoming National Industrial Policy will be highly private sector-driven.”
“Manufacturers are confident that a policy framework anchored on private sector participation will catalyse industrial competitiveness, stimulate productive investment and open new frontiers for growth,” he said.
The Director, Research and Economic Policy Division, MAN, Dr Oluwasegun Osidipe, outlined eight recommendations to put the sector back on the path of recovery.
He urged the Federal Government to appoint economic/commercial attachés in countries with significant Nigerian trade and investment interests to strengthen market intelligence and export promotion.
Osidipe also urged manufacturers to advocate for specialised financing mechanisms for manufacturing, including a manufacturer’s bank offering long-term concessionary credit.
He urged the Federal Executive Council to approve the implementation of the Nigeria Industrial Policy, while manufacturers utilise the MEAL dashboard, sector KPIs and structured feedback loops to track reform performance.
“MAN should be accorded a preeminent role in national power policy and granted membership of the Nigeria Electricity and Regulatory Commission.”
“The government should establish a dedicated joint security task force to safeguard industrial zones nationwide.”
“Government should also mainstream the reports of the MAN summit, blueprint 2.0, and 2025 Think Tank into the Nigeria Industrial Policy and adopt as working documents for the Industrial Revolution Work Group,” he said.
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