The Nigerian economy performed below expectation in the first half of the year (H1’24) and requires a minimum growth of four percent in the next three quarters to meet the target of 3.88 percent gross domestic product (GDP) set by the federal government in the 2024 budget.
Chief Executive Officer of Financial Derivates Company, Mr. Bismarck Rewane stated this yesterday at the 2024 Mid-Year Economic Review and Outlook organized by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos.
He said: “The economy underperformed the expectations for H1’24. Economic growth in Q1’24 at 2.98% is less than the government benchmark of 3.88%. Real GDP has to grow at least 4% in the next three quarters to meet the target.”
Rewane also noted that in the first half, Oil production at 1.3 million barrels per day (mbpd) remained below the budget benchmark of 1.78mbpd; exchange rate depreciated massively by 34% to N1,505 per dollar; while inflation remained untamed at a three-decade high of 34.19%.
The economist however said there is hope for improvement in the second half (H2’24).
“There are silver linings, giving a flicker of hope for H2’24. Oil prices averaged $83 per barrel (pb) in H1’24, and will remain above $80pb in H2’24.
“Federal Account Allocation Committee (FAAC) improvement is expected to alleviate fiscal pressures. Fiscal stabilization fund of N2trn could stimulate growth, but 0.85% of GDP is, no doubt, a drop in the ocean.
“Implementation of food import waiver could taper inflationary pressure, but there are risks – may quicken currency pressure; and stymie domestic agricultural activity,” he said.
On the new minimum wage rate to be announced soon, Rewane said: “Wage increment will boost aggregate demand but carries high inflation risks. It will test the fiscal sustainability of the state governments.”
Earlier, in his welcome address, President of LCCI, Gabriel Idahosa, “In the first half of 2024, the Nigerian economy witnessed multiple macroeconomic headwinds and high uncertainties.
“We need to boost non-oil, real sector production to produce more food, curb rising food inflation, and manufacture goods for exports to earn foreign exchange earnings,” he stated
