PwC Adjusts Nigeria’s 2024 Economic Growth to 3.1%, Warns of High Risks

January 26, 2024
Nigeria's economic growth

By Adedapo Adesanya

Professional consultancy firm, PricewaterhouseCoopers (PwC), has adjusted its forecast for Nigeria’s economy and now sees a gross domestic product (GDP) growth of 3.1 per cent in 2024 as against the 3.0 per cent it said last year.

The firm PwC Nigeria released its latest Nigeria Economic Outlook and highlighted trends that will shape the nation’s economic trajectory in 2024.

The report projects a marginal rise and also sees a decline in inflation, noting that achieving sustainable growth in 2024 requires balancing ambitious fiscal reforms with effective budget implementation.

The firm noted that Nigeria’s 3.1 per cent marginal growth projection in 2024 would happen on the back of sustained policy reforms.

“The growth projection is driven by ongoing reforms, recovering oil production, and a proactive policy environment,” the report highlighted.

It also warned that possible downside risks to this projection include sustained rise in fiscal debt, elevated interest rates, high inflationary levels, foreign exchange liquidity pressures, high exposure to shocks in the global value chain, poor non-oil revenues, and sector development.

In terms of sectoral growth, the main drivers of GDP growth in the last 12 months have been the financial services, information and communication, and utilities sectors.

The firm expects these sectors to continue to drive growth in the short term, adding that sectoral growth will be driven by a combination of demand dynamics, investment, government reforms, and trade dynamics.

The forecast also said Nigeria achieving its budgeted oil revenue in 2024 will depend on the oil production quota of the Organisation of the Petroleum Exporting Countries (OPEC), international oil prices, improved security in the oil-producing regions, and geopolitical factors.

It added that proposed fiscal reforms have the potential to boost non-oil revenue and shape the economy, but success hinges on effective budgeting and execution.

On inflation, PwC advised that the Central Bank of Nigeria (CBN) must independently pursue inflation goals, emphasising inflation control, and maintaining a stable financial system.

“Despite the deployment of monetary policy tools, the inflationary pressure has persisted,” it warned.

“Finding coherence and alignment between fiscal and monetary policy to stabilise prices may enable the achievement of statutory and policy targets in 2024. CBN clarity of policy, transparency of market operations and consistent communication will enhance stability to exchange rate price discovery and market activities,” the report added.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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