Economists at Comercio Partners, a Nigerian firm providing financial advisory and assets management services, have advised the Central Bank of Nigeria (CBN) to critically weigh the option of maintaining a bullish stance at the next meeting of its Monetary Policy Committee in view of the current micro and macroeconomic challenges in the economy and the implications for the nation’s gross domestic product (GDP) in the years ahead.
The experts, in the firm’s report released following the publication of ‘Nigeria’s GDP Growth Q4 2024’ report by the National Bureau of Statistics (NBS) last Thursday, which showed that the economy was decelerating in output, advised the apex bank on the need for a serious rethink on its monetary measures, especially on lending interest rates, in order to support the growth of the economy.
Specifically, the analysts pointed out that the CBN’s committee “must weigh the option of maintaining a bullish stance, risking the exacerbation of growing inflation and potential adverse effects on the economy, or adopting a more assertive approach to address inflation, potentially at the expense of immediate considerations for people’s welfare.
“Looking ahead, it remains to be seen how the CBN will navigate this dilemma. Furthermore, achieving the goal of elevating Nigeria to a trillion-dollar economy will require substantial efforts.
“Addressing the current economic challenges necessitates strategic planning, policy adjustments, and comprehensive measures to propel the nation toward its ambitious economic milestone”, the analysts added.
Data in the just released Nigeria’s GDP result showed that the country grew by 3.46% YoY in the final quarter of 2023 in real terms but that year-on-year the output grew by 2.74% in 2023, representing a decline from the 3.1% growth rate it recorded in the preceding year.
The statistics agency attributed the key drivers of the growth in the quarter under review to the Services sector, which grew by 3.98%, contributing 56.55% to the quarter’s real GDP figure, and Agriculture and Services sectors, which contributed 26.11% and 17.34% respectively.
Despite the reported growth rate in the GDP, the Comercio Partners’ analysts noted that the country exhibited signs of economic vulnerability, with the growth momentum declining by 0.36%, a challenging scenario that is compounded by the simultaneous rise in inflation, soaring by 0.98% to reach 2.99%, and an increase in the unemployment rate by 0.8%, reaching 5%, among other negative indices.
