Unlike other West African countries, Nigeria’s economic growth is projected to remain slow in 2024, according to the African Development Bank’s (AfDB) report published last week.
The report stated that growth is projected to rise to four percent in all West African countries, except for Nigeria and Ghana.
“Economic performance in Nigeria, the continent’s and West Africa’s largest economy, is expected to remain tepid, with growth projected to rise just 0.4 percent in 2024, then 2.9 percent, before improving to 3.7 percent in 2025.
“Defying the weak performance of Nigeria, the continent’s largest economy, smaller countries in West Africa, Benin, Gambia, Guinea, and Togo, have sustained strong growth. Mauritius and Mozambique, two countries hit hard by the Covid-19 pandemic, have emerged strong and sustained the growth momentum that started in 2021,” it said.
The AfDB also projected a slow economic growth for Ghana, but still at a faster rate than Nigeria’s. Owing to high inflation, Ghana’s growth was projected to rise from 1.5 per cent in 2023 to 2.8 per cent in 2024, while Nigeria’s would rise to just 0.4 per cent in 2024.
Nigeria’s slow growth momentum was attributed to the effects of domestic economic reforms like the removal of the fuel subsidy and the unification of the foreign exchange rate which increased inflation and free fall of the naira.
Latest unemployment data shows Nigeria’s unemployment rate rose yet again, and inflation numbers showed the prices of goods and services are moving at their fastest clip in over 18 years, hitting a record 29.9 per cent in January, according to the National Bureau of Statistics (NBS).
The cost of food, which Nigerians spend the bulk of their income on, rose 35.41 per cent in January as against 33.93 per cent in December, as earlier reported by BusinessDay.
After trading on Tuesday, the naira was quoted at N1,551.24/$ at the official market, while it weakened to an all-time low of 1,825 and headed to 2,000 against the dollar at the parallel market.
The AFDB report said that the long-term benefits could outweigh the short-term consequences if Nigeria could channel more than $5 billion, used to subsidize fuel from 2022 through May 2023, toward critical social infrastructure
However, Kingsley Moghalu, former deputy governor of the CBN told BusinessDay in a BusinessDay report published today said that not much will work in Nigeria if the government does not lead by example and with the interest of the people at heart.
“The subsidisation of the lifestyles of Nigerian politicians must end before Nigerians can be persuaded on the economics of subsidy. As I commented at the time, spending around N160 million to purchase imported SUVs for each member of the National Assembly when Nigeria was seeking to borrow $1.5 billion from the World Bank sent the wrong signal to Nigerians and investors. Much about our economic problems is beyond economics,” he said.
This reflected the sentiments of Nigerians who took to social media platform X, to express their grievances concerning government spending.
“Interesting, how a country is poor yet senators can buy brand new SUVs at 160 million each, lots of other wasteful spendings known and unknown. Making policies that make people poorer is number one for the political class while they live and display affluence in the face of everyone both online and offline,” Ayodeji Kayode said in a post.
AbdulAzeez AbdulMaleek, a political analyst however, argued that the Nigerian government should prioritise solutions that work locally, and focus on the long-term effects of the policies.
“I believe in homegrown solutions, Nigerian solutions to the Nigerian problems. Many nations of the world prioritise what works locally above global economic forums’ advice.
“I see efforts made by the Federal government to channel intervention funds to state government, but many of our sub-nationals aren’t complementing the efforts. Government should ensure the interventions ameliorate the pain while focusing on the long-term solutions to achieve results,” he said.
The AFDB recommended that countries with high and persistent inflation, like Nigeria, should further tighten their monetary policies until clear signs that inflation is cooling and returning to target.
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