Posted Thu, Jan 25, 2024 11:22 AM

NESG Launches Macroeconomic Outlook for 2024

L-R Dr Christian H Ebeke, Nigeria's Country Representative, International Monetary Fund (IMF); Mr Niyi Yusuf, Chairman, Nigerian Economic Summit Group (NESG);Dr Osasuyi Dirisu, Executive Director, Policy Innovation Centre (PIC); Dr Tayo Aduloju, CEO, NESG, Dr Olusegun Omisakin, Chief Economist and Director of Research and Development, NESG and Dr Alex Sienaert, Nigeria's Lead Economist, World Bank at the launch of the NESG's Macroeconomic Outlook Report 2024 in Lagos...Wednesday

The Nigerian Economic Summit Group (NESG) on Wednesday, 24th of January, 2024 launched its 2024 macroeconomic outlook with the theme “Economic Transformation Gap: Medium Term Policy Priorities”.

While delivering the opening remarks, chairman of the board of directors of the NESG, Mr. Niyi Yusuf, said that 2023 presented challenges marked by the rigorous implementation of demonetisation policies, widespread insecurity, and a fiercely contested general election, aggravating preexisting macroeconomic and structural issues. These challenges significantly impacted Nigeria's socio-economic landscape and macroeconomic performance. He, however, noted that, with the dawn of a new government, Nigeria is at a transformative juncture ripe with political and economic opportunities to address these challenges, optimise our potential, and achieve vital developmental objectives.

Furthermore, Mr. Yusuf stated that the Russia-Ukraine crisis, global supply chain disruptions, and energy and food crises heightened economic vulnerability throughout the year and that stringent government reforms, including the removal of fuel subsidies and exchange rate alignment, further constrained the real sector, suppressing overall economic outcomes.

The NESG Chairman also reiterated that despite a trade surplus, foreign capital receipts were below expectations on the external front, and the official and unofficial naira exchange rates depreciated beyond the planning expectations of most businesses. Furthermore, he stated that higher prices in 2023 resulted in a decline in the real purchasing power of the minimum wage, and an estimated 4 million Nigerians were pushed into poverty, noting that while the government has implemented interventions, more effort is urgently needed to reverse the country's weak and non-inclusive growth narrative.

While delivering a presentation on the NESG Macroeconomic Outlook for 2024, Chief Economist and Head of Research and Development, NESG, Dr. Olusegun Omisakin, said that Nigeria’s economic growth declined further and that the services sector remained the main driver of growth. He noted that Nigeria’s top-performing sectors took a backseat in 2023, allowing the less-dynamic sectors to take the lead in the economic game, and that sectors with low employment elasticity drove growth in the year, which resulted in Nigeria’s growth performance remaining non-inclusive.

Furthermore, Dr. Omisakin noted that Nigeria’s external trade position has improved, but the journey of transformation remains a difficult one as the country grapples with moving production to highly productive sectors and improving the socioeconomic wellbeing of every Nigerian. He further noted that the Economic Transformation Roadmap outlines three phases of policy sequencing, focusing on monetary stability, effective fiscal management, local content improvement, domestic productivity enhancement, incentives to motivate private sector investments, and human, social, and natural capital development.

In his keynote speech on the CBN Strategic Reform Agenda and Monetary Policy Priorities for the Nigerian Economy in 2024, Governor, Central Bank of Nigeria, Mr. Yemi Cardoso, stated that Nigeria is at a turning point and the bold reforms being undertaken across different segments of the economy, while initially challenging, are ultimately directed towards addressing the challenges in a sustainable manner.

The CBN Governor noted that the IMF anticipates a mild slowdown in global economic growth to 2.9 down from 3% growth experienced in 2023, with Asia driving the global economic growth. “Rising trade barriers, protectionist policies, and global value chain disruptions could exacerbate disruptions in global trade.  Foremost among the factors contributing to a positive outlook is the expectation of improved crude oil prices and production, highlighting the crucial role the oil sector is expected to play in driving economic growth,” he stated. Mr Cardoso noted that the optimistic scenario has the federal government of Nigeria looking towards a real GDP growth of 3.76% for 2024, slightly surpassing the 3.75% of 2023, underpinned by key government reforms that will shape the economy.

Mr Cardoso revealed that the pillars for the 5-year CBN strategy will focus on price stability and monetary effectiveness, robust and resilient financial systems, governance compliance, and advisory to government, and that all the actions of the CBN will revolve around these pillars to ensure monetary, price, and financial system stability and also form the catalyst for inclusive growth and sustainable economic development.

During the panel session, Nigeria Country Representative, International Monetary Fund (IMF), Dr. Christian H. Ebeke, pointed out that transparency is important, but there is a need to ensure every stakeholder understands what is going on and collaborates to address foreign exchange problems bedevilling the country. Speaking in the same vein, the former Vice Chairman, Presidential Economic Advisory Council, Dr. Muhammad Sagagi, said that there is a need for the country to manage her expectations considering that the key determinants for economic transformation are virtually absent, noting that if Nigeria aspires to realise her potential, the country must endeavour to open the economy and leverage private capital and skills to develop the economy. On her part, Director, Policy Innovation Centre, NESG, Dr. Dirisu Osasuyi, said that conversations about economic development must happen at the same time as inclusive development. She stated that there is a need to think about sectors that can reduce unemployment, increase rural penetration of information, and digital access and ensure that the most vulnerable are not left behind.