Nigerian Economic Summit Group (NESG) foresees a boost in economic growth for Nigeria as business activities continue to rise throughout the rest of the year.
Gatekeepers News reports that Laoye Jaiyeola, Chief Executive Officer (CEO) of NESG, spoke at the third Edition of the Mid-Year Review of 2023 Economic Outlook
The event was organised by the Chartered Institute of Bankers of Nigeria Centre for Financial Studies (CIBNCFS), on Tuesday in Lagos.
He said the private sector performance is notably responding favourably to the current policy posture of the new government amid the challenges.
“The Purchasing Managers’ Index (PMI) is considered a perfect predictor of economic growth momentum in Nigeria and across the globe,” he said.
“Hence, there is a likelihood for stronger than expected economic growth in the remaining part of 2023 as firms’ new orders, output growth rate, and inventory activities increase.”
Jaiyeola anticipated that if not managed correctly, the initial policy shocks might amplify inflation and worsen the cost of living crisis.
He emphasized that the convergence of foreign exchange rates would decrease currency risks and boost investors’ confidence. He also mentioned that the monetary policy interest rate could rise until the year’s end.
Regarding socio-economic effects, Jaiyeola noted that the policy shocks from foreign exchange rate convergence and petroleum subsidy removal could exacerbate the cost of living issue. This could lead to an increase in poverty as higher inflation diminishes purchasing power for many households.
Additionally, Biodun Adedipe, chief consultant of Adedipe Associates Ltd, advised the federal government to learn from other countries’ experiences to steer the economy back on track.
“Are there lessons that we can learn from other jurisdictions especially with our dependence on hydrocarbons; there are countries we can learn from like the Netherlands, Saudi Arabia, Malaysia, which had the same currency trouble because of supply just the same way we are having today?” he asked.
“So what did the government do, they took a very firm stand and the bottom line was that the Malaysian economy recovered the following year.
“How about India? India did the monetisation that we also did in Nigeria but it was a fiasco; that was in 2018.
“The outcome in 2018 showed clearly that the monetisation of an economy that is largely driven by cash within a short window will cause trouble for the economy.
“So, the question should have been for us, when we wanted to do our own thing last year, to ask what lessons we can learn from them. And then take that on board and use that to find a way to execute our own.”
