Wednesday, January 29,
2020 / 08:33 PM / NESG / Header Image Credit: NESG
The Nigerian economy is still on the path of recovery, however, at a slow momentum and high level of fragility. Real GDP expanded by 2.28% in the third quarter of 2019, averaging 2.17% in the first three quarters of the year. Inflation rate averaged 11.4% but closed the year at 12% following the effects of the land border closure. Exchange rate stability was sustained on the back of continued Central Bank of Nigeria's interventions while the foreign exchange reserves depleted significantly due to dwindling inflows from foreign portfolio investors and moderating oil prices. On the social aspect, the poverty situation worsened as growth remained non-inclusive - over 100 million people live in poverty. The weak linkage between economic growth and socio-economic impact persists as poverty becomes endemic.
In our Macroeconomic Outlook for 2019, we concluded that growth in 2018 was anaemic and marred by rising economic and social exclusion. We, therefore, proposed an inclusive growth framework for Nigeria with emphasis on broad-based economic growth that delivers improved social welfare. The proposed strategies prioritized industry governance and social sector reforms.
To step up the inclusive growth narrative, our Macroeconomic Outlook for 2020 takes a deep-dive approach to fixing Nigeria's poverty problem through accelerated economic growth and job creation as a precursor to inclusive economic growth. Part I of the report reviews the Nigerian economy in 2019 and provides an outlook for 2020, which will be influenced by several events and policies such as the VAT increase, implementation of the Africa Continental Free Trade Area (AfCFTA) agreement, movement in global oil prices, US-China trade wars, loan-to-deposit ratio and insurance companies' recapitalisation, etc. Part II of the report examines how Nigeria can create significant number of jobs in the medium to long term to lift millions out of poverty.
As we enter this new decade, the government, private sector and other stakeholders must rise up to the challenge, work together and hold one another accountable in delivering a sound future for our great country.