By Babajide Komolafe
NIGERIA’s economy can perform better than the 1.9 percent Gross Domestic Product (GDP) growth rate forecast by the International Monetary Fund (IMF) for 2018.
FSDH Merchant Bank analysts stated this at the media briefing on the bank’s monthly Economic and Financial Markets Outlook for October titled: ‘Local Competitiveness: A Prerequisite for Inclusive Growth’.
Recall that the IMF in its October World Economic Outlook (WEO), reduced its GDP growth forecast for Nigeria in 2018 to 1.9 percent from 2.1 percent forecast in its April WEO.
Speaking at the briefing, Head, FSDH Research, Mr. Ayo Akinwunmi said: “The short-term forecast for the Nigerian economy is unimpressive, according to the latest report issued by the International Monetary Fund (IMF). The uninspiring forecast stresses the need for Nigeria economic managers to implement additional growth-enhancing policies that would lift more Nigerians out of poverty. The IMF released the forecast in its October edition of the World Economic Database, which accompanied its World Economic Outlook (WEO) titled ‘Challenges to Steady Growth’
“The IMF predicts that the Nigerian population will grow faster than the growth in the real Gross Domestic Product (GDP) over the next five years. This means that expansion in Nigeria’s economy may not be enough to improve the standard of living of her citizens. Nigeria’s inflation rate forecast by the IMF shows that there is no hope of single digit inflation rate before 2023. The double-digit inflation rate may make the yields on fixed income securities remain high in Nigeria and thus increase the finance cost for private sector operators.
“We believe the Nigerian economy has the potential to perform better than the IMF’s forecast. For this to materialise, however, coordinated policies are urgently required in the following areas to achieve strong and inclusive growth: security of lives and property, infrastructure, rule of law and diversification of the revenue and productive base of the economy.”
Also commenting on Nigeria’s ranking on the latest World Bank’s Ease of Doing Business, Akinwunmi said that there is need for more policy to increase the country’s competitiveness ranking.
According to him, “Nigeria recorded the lowest scores under the Information and Communication Technology (ICT) Adoption and Innovation Capacity. These two sectors have certain things in common: they both require a certain level of entrepreneurial mind-set, risk-taking and they have the capacity to stimulate growth and enhance productivity needed for improved competitiveness. Some of the initiatives that can change Nigeria’s narrative in these areas include: restructuring of the educational system to provide Information and Communications Technology (ICT) training for students, and provision of financial support for innovation centres to incubate business ideas.”