Nigeria’s GDP to grow 3.5% in 2024: NESG

The Nigerian Economic Summit Group (NESG) on Wednesday said Nigeria’s Gross Domestic Product will grow by 3.50 percent in 2024.

The group made the forecast in its macroeconomic outlook report for 2024, titled “Economic Transformation Roadmap: Medium-Term Policy Priorities”, launched in Lagos today.

According to the group, several reform programs initiated by the government are expected to trigger a rebound in economic growth as tensions over investment are addressed and low productivity in critical sectors is resolved.

He said the services sector will remain the main driver of the economy, while the expected rebound in the country’s oil sector will drive higher real GDP growth in 2024.

In the third quarter of 2023, the Nigerian economy recorded a growth of 2.54 percent, representing a slight rebound from the 2.51 percent seen in the second quarter.

During this period, the oil sector experienced a moderate contraction and the impact of government reforms aimed at improving production had not yet materialized.

NESG releases macroeconomic outlook for 2024. [PHOTO CREDIT: Official X handle of NESG | https://x.com/officialNESG/status/1750221482595066212?s=20]“Based on the optimistic vision of comprehensive reform of the country’s economic system and stable prospects, Nigeria is expected to experience investment inflows in 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.

Inflation

The group also projected an average of 21.5 percent for the year from an estimated average of 24.5 percent in 2023.

The latest data from the National Bureau of Statistics shows that Nigeria’s annual inflation rate rose to 28.92 percent in December 2023 from 28.20 percent in November.

The NESG said the country will experience moderate inflationary pressure this year.

“The slowdown in inflationary pressure will be driven by lower structural monetization of the deficit, relative exchange rate stability and other intensified monetary measures by the Central Bank. Furthermore, food inflation will continue to be the key driver of inflation due to rising cost of credit, insecurity and internal displacement.

“The removal of fuel subsidies will continue to increase core inflation, mainly through high transport and energy costs,” he said.

NESG releases macroeconomic outlook for 2024. [PHOTO CREDIT: Official X handle of NESG | https://x.com/officialNESG/status/1750221482595066212?s=20]It also projected that the unemployment rate will slow, while anticipating higher productivity and production in labor-intensive sectors such as construction, agriculture, commerce and manufacturing.

“The rate is projected to rise to around 5.0 percent, while the poverty headcount is expected to approach 41.5 percent due to better performance in these employment-intensive sectors,” NESG said in its outlook. .

With a population growth rate estimated at 3.2 percent, this trajectory will reinforce the overall impact of economic growth on real per capita income.

He said the combination of these factors, along with a consistent policy environment, is expected to strengthen foreign capital inflows in 2024.

The country is positioned to maintain a trade surplus, increase foreign reserves and experience decreasing exchange rate pressures throughout the year.

With lower political risks and higher investment returns, the likelihood of attracting unsuspecting foreign investors and activating previously dormant funds among local investors appears promising, the NESG said.