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Nigerian economic confidence falls by 3% in 12mths — ACCA

Projects 2.5% GDP growth in 2019

By Elizabeth Adegbesan

A survey report from  the Association of Chartered Certified Accountants (ACCA) and Institute of Management Accountants (IMA) has shown that  Nigerians’ confidence in the economy fell by 3.0 percent in 12 months ending December 2018.

Meanwhile, the ACCA projected that the country’s economy would grow by 2.0 to 2.5 percent this year.

Nigerian

The survey report titled: “Global Economic Conditions (GECS)” stated:  “The poor near-term outlook for Nigeria is reflected in our GECS score, which shows confidence fell in the final quarter of 2018 and is now at its lowest level in a year. The recent fall in oil prices will weigh on exports and government revenues. While the non-oil economy has been improving, consumer demand is soft, restrained by a 23 percent unemployment rate. Overall GDP growth this year is likely to be very modest at between 2 percent to 2.5 percent.”

Foreign investment inflow into oil industry dips to $118m

But Nigeria is not alone in the low ratings. The global accountants also imagined that major economies would suffer some setbacks.

It therefore stated:  “The global poll of 3,800 accountants shows that all key regions recorded a negative confidence score with signs of growth weakening in the world’s three biggest economies – the US, China and the Eurozone. Global economic confidence fell for the third consecutive quarter in  the fourth quarter of 2018 (Q4’18), ending the year at an all-time low.”

The report revealed: “the biggest concern for respondents was against rising costs, with 55 percent citing this as an issue, 47 percent of respondents globally are considering laying off staff, with just 18 percent considering taking on new workers, 39 percent of respondents are considering scaling back investment in new capital projects, compared with just 16 percent who are looking to increase investment in new projects    and the possibility of suppliers going out of business being a concern for just 12 percent of respondents, unchanged from Q3”.

Commenting on the development, Head ACCA, Nigeria, Thomas Isibor, said: “The report finds that despite an improvement in the non-oil economy, consumer demand is soft, restrained by a 23 percent unemployment rate. Overall GDP growth in 2019 is likely to be very modest at between 2 percent to 2.5 percent. Presidential elections in February increase uncertainty in the near term but the outcome may result in more business friendly policies.”

On his part, Head of Business Insights, ACCA, Narayanan Vaidyanathan, said: “Economic confidence over 2018 has been turbulent, with end of calendar year results downbeat compared to the start of 2018. It’s been interesting to look back at  the GECS from the start of 2018, when we recorded  economic confidence at its highest since the first survey was issued assessing Q1’ 2009. Last year was clearly a roller-coaster ride and the outlook for 2019 is also uncertain.”

The fieldwork for the Q4’18 survey took place between  23 November and 7 December 2018  and attracted 3773 responses from ACCA and IMA members around the world, including 302 Chief Financial Officers (CFOs).

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