UPDATE 1-Nigeria sees inflation at 11.95% by end-2021 from 14.89% last year

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By Chijioke Ohuocha
ABUJA, Jan 12 (Reuters) - Nigeria expects inflation to
decline to 11.95% by end-2021 from an almost three-year high of
14.89% registered in November, Finance Minister Zainab Ahmed
said on Tuesday, adding that the government will work on
reducing food prices and the high cost of doing business.
She said inflation would still be above the government's
single-digit target. Inflation has been in double digits for
almost three years after climbing for the 15th straight month in
November, lifted by higher food prices.
Nigeria is facing its worst economic crisis in 40 years,
triggered by a coronavirus-induced crash in oil prices that has
hammered state revenues, creating large financing needs and
weakening the naira. That has made imports more expensive,
adding to inflationary pressure.
"Inflation is expected to remain above the single-digit but
we hope, working together with the monetary authorities, trade
and finance, we can reduce inflation," Ahmed told a virtual
conference discussing the 2021 budget.
Nigeria is planning for a budget deficit of 5.60 trillion
naira or 3.93% of GDP, below the revised 2020 deficit of 6.15
trillion naira. The minister said the 2020 deficit had widened
by 1.49 trillion naira due to additional funding required to
tackle COVID-19.
Ahmed said the 2021 deficit would be largely funded by
foreign and domestic borrowing. She said Nigeria would return to
the eurobond market this year if conditions were right, having
shelved eurobond issuance last year due to disruptions caused by
coronavirus restrictions.
Nigeria has been talking to the World Bank about a $1.5
billion budget support loan. Ahmed said Nigeria was implementing
some economic reforms requested by the Bank to enable it to
approve the loan.