Davido, Toke Makinwa Asks Nigerians To Pray For Nigeria

Experts Anticipate More GDP Drop In Nigeria

by Mercy Ulasi
A+A-
Reset

An further low in Nigeria’s Gross Domestic Product (GDP) is anticipated in 2023 against the backdrop of ongoing operational environment challenges.

The prediction was made by analysts at Afrinvest West Africa, a Lagos-based investment banking firm. This is a huge decrease from the 3.1 percent real number for 2022 that was released by the National Bureau of Statistics, NBS, last week. The 2022 result was a significant decrease from the 3.6 percent observed in 2021.
The experts listed a number of variables that will have a negative influence on the economy, but they added that they anticipate the incoming administration would solve these issues.

, it will take time before such measures would begin to yield positive results.

The analysts stated, ”Looking ahead, our 2023 growth expectation for the broader economy is conservative, blue sky case, at 2.96% Year-on-Year, YoY, relative to 2022.
”Our position is informed by the estimated impact of some of the self-inflicted economic shocks – repeated PMS scarcity episodes and the ill-implemented currency redesign policy – in recent months on H1:2023 (first half 2023) growth performance.

CBN’s Policy Blocks Banks, Investors From N622bn illegal Earnings

Advertisement

”On the positive, we anticipate less external shocks from global monetary policy and price trends compared to 2022.

”On the home front, we expect that the incoming administration would begin to implement market friendly reforms and deepen the fight against insecurity and oil theft.

”However, given the time lag required for the impact of reforms to manifest, we are less optimistic of any positive GDP surprises in the short term”.

Giving insight into the 2022 GDP performance, the analysts stated: ”The Full Year (FY):2022 GDP performance was mainly supported by the resilient non-oil economy which grew 4.8% YoY while the oil economy contracted by 19.2% YoY amid extended recession spell (now eleven successive quarters).

Hence, the share of oil in the overall economy fell to record low of 5.7% in 2022, reflecting the dismal average crude oil production of 1.37mbpd (2021: 1.60mbpd) fuelled by the scourge of industrial-scale oil theft, ageing oil wells, and operational challenges”.

2023 Presidency: Tinubu Reveals In 80-Page Manifesto Document

Continuing, the analysts stated: ”In terms of sectorial analysis, the Services sector remains the brightest segment of the economy post-2020 pandemic, while the performance of the labour-elastic Agriculture and Industries’ sectors trail their long-term averages. ”Precisely, the Services sector grew by 6.7% YoY in FY:2022, driven by faster FY growth in Financial Services (up 16.4% against 10.1% in 2021) and Information & Communication (up 9.8% against 6.6% in 2021), as well as the slower FY expansion in Trade (up 5.1% against 8.6% in 2021).

Advertisement

”We attribute the sturdy performance of the Financial Services sub-sector to resilient outing of traditional banks in 2022 (9 out of 13 listed banks reported double digit growth in profit as of first nine months in 2022), and the deepening footprint of neo-banks and fintechs.

”The performance of the Information & Communication activity sector can, in part, be traced to increased investment in 5G network and off-take of payment banking services by leading telcos.
”Also, intense pre-election campaign spending as evidenced in the 5.4% and 5.6% YoY growth of Broadcasting and Publishing sub-activity sectors – the highest by both since pre-election year 2018 – contributed to the firm growth of the information & communication activity sector.

2023: Read Some Important Things Peter Obi Said At Campaign Rally In Benue State

Advertisement

”Conversely, the FY growth of the Agriculture sector printed weak at 1.9% YoY – the lowest in over a decade – driven by prolonged insecurity challenges in the agrarian belt and weak mechanisation.
”Also, adverse weather condition which led to a devastating ?700billion plantation loss in the 2022 flooding dampened the sector’s momentum in the year.

”Likewise, the Industries sector contracted for the third consecutive year by 4.6%, largely due to the three-year long recession in the Oil Refining sub-activity sector, combined with the knock-on effect of FX scarcity, sharp Naira depreciation, and PMS & diesel price hikes on other Non-oil Industries activities”.

Post Disclaimer

The opinions, beliefs and viewpoints expressed by the author and forum participants on this website do not necessarily reflect the opinions, beliefs and viewpoints of Anaedo Online or official policies of the Anaedo Online.

Advertisement

You may also like

Advertisement