2023: A tumultuous past
In 2023, Nigeria faced a myriad of challenges that left a notable mark on the economy. From the naira cash scarcity to the election saga, consumers were unable to catch a break. Further worsening their plight was the desegmentation of the forex markets and the implementation of the subsidy removal in June. Sequel to the policy reforms, inflation heightened to an 18-year high of 28%, and the naira depreciated by 70.74% to N1,210 from N740 in 2022, quickening a cost-of-living crisis. Investment inflows also plummeted by 34% to $2.82bn in the 9 months to September, the worst in over a decade.
Despite these setbacks, there were notable bright spots. Domestic oil production rose by 11.70% to 1.34mbpd from 1.20mbpd and external debt decreased 0.24% ($41.59bn) from $41.69bn, year-on-year. The equities markets posted a stellar performance of 45.9% (YTD), the highest since 2020. Moody’s upgraded its outlook for Nigeria from stable to positive; the Lagos blue line rail project was inaugurated; and the Dangote refinery has been receiving crude oil to start production of petroleum products.
2024: An uncertain future
Like a famous quote by Eleanor Rosevelt, “You will be damned if you do and damned if you don’t,” Nigerian policymakers will be put in a tight spot in 2024. The progress of the Nigerian economy is hinged on some bold policy steps, but not without some short-term pains, which will eventually lead to long-term productivity gains. Interest rates will increase again in 2024, the federal government is expected to open talks with the IMF for a policy support program and debt restructuring. Inflation is expected to peak at 31% in H1’24 before moderating to 22% at the end of H2’24. The naira is expected to trade as low as N1,300 in H1’24 before appreciating towards N950-N1000/$. Dangote Refinery is expected to be in full operation in 2024, which will increase fuel supply and reduce queues at the filling stations. Furthermore, public-private partnership activities will increase and drive productivity for the Nigerian economy in 2024.
These and other burning economic issues were discussed on Channels TV Business Incorporated and Special-End-of-Year-Programme by FDC’s MD, Mr. Bismarck Rewane
Click the link to watch the videos.
Enjoy your read!