The Nigerian Economic Summit Growth has projected an increase in real Growth Domestic Growth (GDP) from 2.54 per cent to 3.50 per cent in 2024.
The projection is contained in the Macro Economic Outlook released by the Group in Lagos on Wednesday where it also projected an increase in oil production output, which will in turn drive GDP growth and increase revenues for the government to implement the 2024 budget.
This is just as the Central Bank of Nigeria (CBN) governor, Olayemi Cardoso said inflation will moderate this year and describe the Naira as ‘undervalued.’
Cardoso who presented a keynote speech at the occasion said the apex bank is implementing an “Inflation-targeting policy” to reduce the inflationary pressures from the current 28.9% to 21.4 per cent in 2024.
According to the NESG report, “Real GDP growth is expected to rise rapidly to 3.50 per cent in 2024 as a result of various reform programmes initiated by the government, which are expected to trigger an uptick in economic growth as strains on investment are addressed, and low productivity in critical sectors is resolved. 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.
“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 noted.
The report said, “Nigeria’s macroeconomic projections for 2024 hinge on the assumption of a global crude oil price averaging US$90/barrel, notably higher than the proposed US$77.96/barrel delineated in the 2024 budget. Consequently, this situation is poised to generate surplus demand for crude oil, sustaining elevated prices throughout the year.
Concurrently, intensified efforts to curb crude oil theft and boost oil production in Nigeria are expected to yield an average crude oil production of 1.75 million barrels per day (mbpd) in 2024. This represents a notable improvement from the 1.30 mbpd recorded in 2023. This scenario sets the stage for the government to accrue higher revenue in 2024.
The report was presented by Chief Economist and Director of Research of NESG, Dr. Olusegun Omisakin who said, “What we proposed in our report is a roadmap that not only speak to the need for transformation but also to how we get it done and the time frame that we use also matters.”
Commenting on the outlook, the Chairman, Niyi Yusuf said the group recognised “The current administration’s efforts in stabilising the economy, but given the depth of the problems, more still needs to be done and quickly too and NESG stands ready to continue its collaborative efforts with the federal and subnational governments to achieve these transformative goals as a concerted and coordinated approach and effective policy implementation will propel Nigeria towards a more resilient, inclusive and prosperous future.”
…CBN targets 21.4% inflation in 2024
Meanwhile, the CBN governor said the policies aimed at reducing inflationary pressure would have a profound impact on businesses and reflate the economy in a way that more jobs would be created.
Cardoso, who joined the event virtually also highlighted various steps being taken to achieve economic stability in 2024, saying the CBN would remain focused on clearing the forex backlogs and stabilising the exchange rate.
Over time, the cost of living crisis has worsened over the rising inflation, which reached its peak in 2023, currently at 28.9 per cent.
But Cardoso stated that the economic outlook for 2024 remains positive on the strength of the various reforms being undertaken by the federal government.
“Inflationary pressures are expected to decline in 2024 due to the CBN’s inflation-targeting policy, which aims to rein in inflation to 21.4 per cent. This will be aided by improved agricultural productivity and the easing of global supply chain pressures, benefiting businesses by boosting consumer confidence and purchasing power.
“The CBN’s adoption of the inflation-targeting framework involves clear communication, the use of monetary policy instruments, and collaboration with fiscal authorities to achieve price stability, fostering market confidence and positively influencing consumer behaviour.
“The outlook for decreasing inflation in 2024 will have a profound impact on businesses, providing a more predictable cost environment and potentially leading to lowered policy rates, stimulating investment, fueling growth, and creating job opportunities.
“Additionally the banks have reverted to the conventional monetary policy approach with the focus on attaining price stability, which fosters sustainable economic growth for Nigeria.”
He said the CBN is collaborating with the Ministry of Finance and the Nigerian National Petroleum Company Limited (NNPCL) to ensure that all fx inflows “Are returned to the Central Bank.”
According to him, the coordinated effort will “greatly enhance the bank’s FX inflow” and boost the reserves.
“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction of petroleum products import and implementation of a market determined exchange rate policy by the Central Bank of Nigeria,” he added.