Tinubu’s first steps: near-term pain, long-term gain?

The removal of fuel subsidies and the devaluation of the naira are likely to push inflation in Nigeria towards 35% y/y, which will prompt further interest rate hikes by the central bank and weigh on GDP growth over the coming quarters. Our growth forecasts for 2023-24 lie below the consensus. If the policy shift sticks, though, this would pave the way for stronger growth over the medium term.

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