The Nigeria Economic Summit Group has stated that Nigeria’s economy will grow more strongly in 2023 as a result of rising firm new orders, output growth rates, and inventory activities.
This information was provided by the NESG’s Chief Executive Officer, Mr. Laoye Jaiyeola, at the third edition of the Mid-Year Review of 2023 Economic Outlook, which was held on Tuesday in Lagos and was hosted by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies.
The head of NESG disclosed that Nigeria’s private sector performance is noticeably responding favourably to the new government’s present policy stance.
As businesses place fresh orders, Jaiyeola said there is a chance for better-than-anticipated economic growth in the remaining months of 2023.
“The Purchasing Managers’ Index is regarded as a perfect indicator of the pace of global and Nigerian economic growth.
“There is a likelihood that the economy will grow more quickly than expected in the remaining months of 2023 as firms’ new orders, output growth rate, and inventory activities rise,” the report stated.
He cautioned that convergence of foreign exchange market rates would reduce currency risks and further added that the new policy regime would stimulate investors’ confidence in the economy. He predicted that initial policy shocks could worsen the cost-of-living crisis and increase inflationary pressure if not properly managed.
The head of NESG also stated that interest rates for monetary policy would probably increase until the end of the year, citing early policy shocks from the convergence of foreign currency rates and the elimination of gasoline subsidies that would increase the cost of living.
He pointed out that by doing this, more individuals would fall into the poverty range because rising inflation would reduce many households’ purchasing power.
In the event, the Chief Consultant, of Adedipe Associates Ltd., Dr. Biodun Adedipe, urged the Federal Government to learn from countries that had faced similar challenges in order to get the economy back on track, adding:
“Are there any lessons we can draw from other jurisdictions, particularly given our reliance on fossil fuels? There are nations like the Netherlands and Saudi Arabia who had the same currency trouble because of supply just the same way we are today.
“So, what did the government do? They took a very firm stand, and the economy recovered the following year,” he said.
He stated that the results of 2018 made it abundantly evident that an economy that is primarily fueled by cash will experience problems if it is fully monetized over a short period of time.