The Central Bank of Nigeria (CBN) stated that the global capital flows are expected to witness more distress as the Russia-Ukraine war persists.
The Governor of the Central Bank of Nigeria, Godwin Emefiele at the 284th Monetary Policy Committee Meeting disclosed this on the 21st of March 2022.
The Governor while speaking at the meeting noted that the committee considered the heightening uncertainties confronting the global economy as the Russia-Ukraine war persists and numerous sanctions are being imposed on Russia. The Governor also spoke extensively on the global supply chain been disrupted as both countries at war are major players in the global commodities market.
What the CBN governor is saying
The Governor said, “The ongoing war and the resultant sanctions against Russia will continue to have a considerable impact on the global supply chain as both countries are major players in the global commodities market.”
Emefiele noted that, “With the both countries significantly interconnected to the global financial markets, global capital flows are expected to experience some downturn, exacerbated by the increasing sanctions on Russia.”
He then mentioned that this expected global economic downturn would lead to the revision of the international body on the forecasted global output growth in 2022 and 2023. In his words, it states that, “Consequently, the earlier projections by the International Monetary Fund (IMF) fpr global output growth in 2022 and 2023 of 4.4 and 3.8 percent respectively, are likely to be revised downwards due to the overarching downside risks identified on the horizon.”
In addition, the Governor stated that the extent of the backlash in terms of the capital flows due to the ongoing war has not being fully crystallized. However, presents a significant downside risk to the recovery of the global economy from the COVID-19 pandemic, which still mutates into highly infectious strains in the world, if the crisis is not resolved immediately.