Despite higher growth projections for the Nigerian economy by both the World Bank and the International Monetary Fund (IMF) in 2022, a Nigerian economic expert, Biodun Adedipe, says he sees the country’s economy further declining during the year.
The World Bank had projected the country’s economy to grow at about 1.5 per cent by April. But the IMF raised its projection to 3.4 per cent.
But Adedipe, who is the founder and Chief Consultant at B. Adedipe Associates Ltd. (BAA Consult) said the growth forecast for the Nigerian economy in 2022 has been reviewed downwards to 3.27 percent, from its earlier projection of 3.74 percent announced in January.
Adedipe announced the new projection at the roundtable session on the Mid-Year review of Economic Outlook for 2022 organised by the Chartered Institute of Bankers of Nigeria (CIBN) in collaboration with BAA Consult, on Tuesday in Lagos.
“So, for us in BAA Consult, we have dampened expectations when we started the outlook at the beginning of the year.
“We projected between 3.74 percent growth at that time, both the Internal Monetary Fund (IMF) and the World Bank had 1.5 percent by April. IMF increases its own from 1.5 to 3.4 percent.
“But as at today, based on the first half year reviews, what we see as the likely outcome of our GDP growth this year is 3.27 per cent; no longer 3.74 per cent because of what has happened (insecurity).
“So, we must therefore take concrete actions with respect to insecurity, which is the measure of economic growth as of Nigeria today.
“And of course, our policies with export promotion, fiscal discipline must be structurally addressed, the issue of fuel subsidy and the obvious corruption in that as well,’’ Adedipe said.
The volume of refined petroleum products Nigerians consume, and the amount paid on subsidy, if compared together, would tell that something was missing somewhere.
Although he acknowledged that he was not in government, and as such did not have access to all the data, Adedipe said as analysts they were able to interpret what they see, and within the limits of what they see.
He said it was clear that talking of fuel subsidy, the trillions of Naira in Nigeria today, there must be some fraud somewhere .
“But we must develop the courage to address it. If we do that, then we’ve started the process of getting the economy in the direction it should go,’’ he said.
He said that tremendous energy in Nigerians and our corporate entities would make the economy work, `only if we get the right signals from the fiscal authority in charge of policy making’.
The Director, Research Department, Central Bank of Nigeria (CBN), Michael Adebiyi, said “against the backdrop of the prevailing headwinds to the positive outlook of the economy, the future looks optimistic.
Adebiyi said this sense of optimism was based on the various efforts by the CBN to reposition the financial and real sectors of the economy for sustainable development.
“However, more still needs to be done, particularly in the agricultural sector and Information Communication Technology,’’ he said.
Adebiyi, represented by an Assistant Director, CBN, Adeniyi Adenuga, called on the fiscal authorities to support the intervention efforts of the apex bank to stabilise the economy.
This, he said, could be achieved by providing competitive tax incentives for the importation of large-scale and high-impact technology as well as innovation to enhance agricultural yield and efficiency in the entire value chain.
He said that efforts at addressing the persisting insecurity challenges in the country should be accelerated to help address food-supply disruptions, thereby mitigating the rising food inflationary pressures in the short-term.
Adebiyi expressed optimism that the apex bank would sustain its current credit support facilities to the real sector to boost agricultural output, for improved value chain and export value.
This, he said, would restore relative stability in the foreign exchange market.
To sustain the 100-for-100 Policy for Production and Productivity (PPP) and the Naira-4-dollar scheme and enhance the Foreign Exchange position in the Investors and Exporters window, the Director emphasized the support of the banks.
He said this could be attained by encouraging the participation of top 100 non-oil exporters in the RT200 FX programme, adding that these would help in stabilising the exchange rate and boost reserves accretion in the short-to-medium term.
He called on stakeholders to come up with useful recommendations that would improve and boost the growth of the Nigerian economy and policy options that could be adopted to tame inflation in the economy.
The President of CIBN, Ken Opara, had earlier said the event was conceived by the CIBN Research Committee, to help evaluate the performance of the Nigerian economy in the prior half of the year, while providing an outlook for the second half of the year.
Specifically, he said the event would assess the trends of macroeconomic indicators in the first six months of 2022 as well as the performance of key sectors of the economy.
The maiden edition of the Roundtable held on August 13, 2021 with participants from across the globe.
This second edition of the Mid-Year Economic Review and Outlook was aimed at following up on the National Economic Outlook event usually held at the beginning of each year where actual performance/trends of economic indicators are compared with predictions asserted at the beginning of the year.