Adedapo Adesanya
By Adedapo Adesanya
The Nigerian Economic Summit Group (NESG) on Wednesday said that Nigeria’s Gross Domestic Product would grow at 3.50 per cent in 2024, with inflation projected to average 21.5 per cent in the year
The group made the forecasts in its 2024 macroeconomic outlook report titled Economic Transformation Roadmap: Medium Term Policy Priorities, launched in Lagos on Wednesday, noting that various reform programmes initiated by the Bola Tinubu-led government are expected to trigger an uptick in economic growth as strains on investment are addressed and low productivity in critical sectors resolved.
It said the services sector will remain the economy’s key driver, while the anticipated rebound of the country’s oil sector will push stronger real GDP growth in 2024.
As of the third quarter of 2023, Nigeria’s economy recorded a growth of 2.54 per cent, showing a slight uptick from the 2.51 per cent observed in the second quarter.
During this period, the oil sector experienced a moderated contraction, and the impact of governmental reforms targeting output enhancement had yet to materialise.
“Based on the optimistic view of a comprehensive overhaul of the country’s economic system and stable outlook, Nigeria is expected to experience inflows of investments into key sectors.
“This will result in improved sectoral productivity and generate significant jobs that would moderate or slow down the growth of unemployment in Nigeria,” the NESG said.
The group also projected the moderation of the inflation rate to 21.5 per cent from an estimated average of 24.5 per cent in 2023.
The latest data from the National Bureau of Statistics shows Nigeria’s annual inflation rate rose to 28.92 per cent in December 2023 from 28.20 per cent in November.
The NESG said the country will experience moderate inflationary pressure this year, which aligns with that put forward by the Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, who put his target at 21.4 per cent.
“The slowdown in inflationary pressure will be driven by lower deficit monetisation structurally, relative exchange rate stability, and other heightened monetary measures by the Central Bank. In addition, food inflation will remain the fundamental driver of inflation due to increased cost of credit, insecurity, and internal displacement.
“The removal of fuel subsidies will continue to increase core inflation, primarily through high transport and energy costs,” it said.
It also projected that the rate of unemployment will slow down while anticipating enhanced productivity and output in labour-intensive sectors such as construction, agriculture, trade, and manufacturing sectors.
“The rate is anticipated to ascend to around 5.0 per cent, while the poverty headcount is expected to approach 41.5 per cent due to improved performance in these job-intensive sectors,” NESG said in its outlook.
With a population growth rate estimated at 3.2 per cent, this trajectory is set to bolster the overall impact of economic growth on real per capita income.
It said the combination of these factors, alongside a consistent policy environment, is expected to strengthen foreign capital inflows in 2024.
The country is positioned to sustain a trade surplus, increase foreign reserves, and experience diminishing exchange rate pressures throughout the year.
The NESG said with diminished political risks and enhanced returns on investments, the likelihood of attracting confident foreign investors and activating funds previously inactive among local investors appears promising.
