CAPE Economic Research and Consulting, one of the global leading economic research firms, has stated that the current level of growth in Nigeria’s economic output measured as Gross Domestic Product (GDP) cannot guarantee the socioeconomic wellbeing of Nigerians on a sustainable basis.
The research firm, in its just published ‘Economic Newsletter, Issue 3, Vol 1, January 2024’ edition, noted that in the last quarter of 2023 the nation’s economy recorded output growth despite the persisting macroeconomic challenges.
According to the firm’s analysts, Nigeria’s output growth returned to expansionary path after two months of consecutive decline while the Stanbic-IBTC headline purchasing managers’ index (PMI) rose to 52.7 index points in December 2023 from the 48.0 recorded in the previous month, indicating an impressive improvement in the private sector business activity during the period under review.
They, however, noted that Nigeria’s real GDP growth remained sluggish and fragile at an average of 2.45 per cent in the first three quarters of 2023 without much improvement expected in the fourth quarter despite improved PMI in December 2023.
The researchers attributed the unimpressive performance of the nation’s economy to the harsh business environment, which led to the exit or planned exit of major multinationals such as GlaxoSmithKline (GSK), Unilever Nigeria (Home and Skin Care Category), Sanofi-Aventis, Procter & Gamble and more recently Jubilee Syringe Manufacturing.
They projected that the exit of these companies would not only dampen output growth in the near to medium term, but also erode investors’ confidence in the Nigerian economy, irrespective of the numerous efforts of the current administration in attracting foreign investment into the country with the attendant negative implications for unemployment and poverty level to bite harder in 2024.
The experts stated: “In the overall analysis, the anticipated annual real GDP growth for Nigeria in 2023 hovers around 2.5 per cent.
“This rate falls considerably short of being deemed sufficient for enhancing the well-being of citizens, particularly in an economy characterized by an annual population growth of about 3.0 per cent”, the analysts added.
