FDC ECONOMIC SPLASH – NOVEMBER 24, 2023 [Re: Nigeria’s GDP (Q3’23) experienced tepid growth of 0.03% to 2.54%]

Dear Subscriber,

The National Bureau of Statistics (NBS) unveiled Nigeria’s third-quarter real GDP growth figures this afternoon. As widely expected, the data reveals a marginal uptick in real GDP from 2.51% to 2.54% compared to the preceding quarter. The tepid increase in growth was primarily driven by the services sector, especially telecommunications, and financial services including insurance. Among the 46 business activities monitored by the NBS, 22 of them expanded, while 12 slowed, and 12 others contracted.

The suboptimal growth in Nigeria underscores the economic impediments it faces and highlights the need for comprehensive reforms. In a politically charged environment, Nigerian policymakers seek positive economic indicators that are not only visible but can be felt by the general populace. This will test the administration’s unwavering commitment to implementing reforms designed to reshape the economy, attract investments, and realize its 6% growth target—an attainment last witnessed in the year 2014.

What Next?

Looking ahead, there is cautious optimism for a mildly stronger growth in Q4 compared to Q3. The International Monetary Fund (IMF) anticipates a full-year growth rate of 2.9% in 2023.  The policy-making environment is expected to become clearer and more predictable, especially in exchange rate management, and the curtailment of subsidies on petrol and electricity in the near term. However, the tangible benefits of market reform policies are unlikely to manifest until the second quarter of 2024.

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