According to the latest predictions, it is expected that Nigeria will see slower economic growth this year. There are many different reasons that are being seen as key contributors to the slow growth. These issues include the high inflation in the country, the monetary policies by the Central Bank of Nigeria and the power issues in the country. All of the reasons have hurt the economy of the country in more ways than one.
The report issued by EIU
The EIU or also known as the Economist Intelligence Unit is the analysis and research division of the Economist Group, which also happens to be the publisher of The Economist Newspaper. The report was published on 23rd March 2022 and contained many reasons and statistics that verified the claim of slower economic growth for Nigeria. The EIC mentioned that amongst the major reasons for slow growth are the recent monetary policies that have been presented by the Central Bank of Nigeria. Part of the report said, “The slowdown will stem from continued erosion of household purchasing power by inflation, monetary tightening by the CBN and power-supply issues, with low water levels and inadequate gas supply constraining production”.
All of the reasons have a direct effect on the economic circumstances of the country and can reduce the growth of Gross Domestic Product by 3%.
The report has an extensive analysis of Nigerian economics that will expand to the year 2026. As per the report of the EIC, Nigeria should see an increase in economic growth in 2023 and 2024 before falling back to slower growth in 2025 and 2026. The Economist Intelligence Unit believes that the reason for the increase in growth within the next two years will be due to a reduction in imports and an increase in exports. This will, according to economists, tilt the balance of payments in favour of the Nigerian economy.
Emefiele on Nigerian Economic Growth
Godwin Emefiele is an economist that has been serving as the Governor of the Central Bank of Nigeria. Back in 2020, Emefiele expressed concerns about the slow growth of the country in 2022. After the monetary policy committee meeting, the Governor addressed the media and expressed concern based on the data presented at that time. He outlined macroeconomics indicators and suggested suppressed growth for the Nigerian economy. During his statement, he said, “is hinged on the dampening impact to the growth of rising energy prices in the domestic economy, tightening external financial conditions and the persistence of legacy security and infrastructural problems.”
The future of the Nigerian economy
As made clear by both the reports provided by the EIC and various economists of Nigeria, the growth of Nigerian economics will be slow. The country is facing many issues in growing at a steady pace due to different policies and energy prices. This ultimately means that the country has to rely on increasing its exports while reducing its imports. Through the balance of payments and increasing the gross domestic product, the Nigerian economy can find a steady pace of growth. The assessment by the report has been made for the next 4 years. However, only time will tell the fate of the Nigerian economy.