By Emmanuel Elebeke

By Emmanuel Elebeke

Economists and public affair analysts have hinged the 2024 economic performance on three main variables including policy changes, 2024 budget efficiency and ‘miracles’.

They have based their positions on the outcome of the various economic policies and measures which they said had left economic performance at the end of 2023 with low GDP growth, high exchange rate, high interest rates, high energy cost, and unfriendly environment for doing business.

Reflecting on 2024 in a chat with Vanguard, a renowned economist and Director of Centre for Social Justice, Ezeh Onyekpere, said, ‘‘The compartmentalisation of time into years raises some false hopes of a new beginning, whilst economic policies seem to be a continuum. The possibility of change or improvements in macroeconomic indicators or economic performance can only arise from three possible scenarios. The first is the introduction and implementation of new and more nuanced policies. The second is the maturing of existing policies when their benefits start to accrue. The third could be from a windfall or miracle not planned for by the government.

“For now, I am not aware of new policies that will bring improvements in 2024. Also, the existing policies do not have any trajectory of maturing into improvements in macroeconomic indicators.

“Our productivity is not about to improve, to increase our GDP; we have no plan to increase exports, so as to earn more foreign exchange, which will improve the value of the naira. 

“However, we may stop fuel imports based on Dangote’s refinery, not the technically refurbished public refineries, which will not produce fuels.”

On security, Onyekpere said, he sees no change but a continuation of the norm.

“Insecurity is still on the increase, as exemplified by the Plateau State massacre as farmers are still unable to ply their trade to reduce food inflation. I see no change but a continuation of the norm.

“Companies are closing, and unemployment is increasing despite the cruel jokes dished out as employment reports by the National Bureau of Statistics. 

“Electricity distribution is not improving, and the environment for improved productivity is not improving. The 2024 federal budget is not result oriented. It is filled with frivolous projects and administrative capital that are not targeted at the improvement of the human condition.”

Also commenting, another renowned economist, Dr. Emeka Okongwu sees Nigeria as a work in progress. 

He said, “If you want to look at the macroeconomic indices from the positions of the budget, I can forecast a macroeconomic stability in 2024. But in terms of inflationary rate, unfortunately, the global cost of food has created a lot of distortions, inflation will rise in 2024 but it will not be perculiar to Nigeria. What will matter is how Government is going to manage it.

‘‘There has to be  some kind of inputs to stabilizing high cost of living, especially with regards to high cost if food items.’’

On the Ease of Doing Business, Dr. Okongwu said, business is driven by  the macroeconomic policies, what needs to be done is to check what happened last year, “was there some indicators in Ease of Doing Business?, was there an attempt to have something close to that? 

” For me, it is not going to happen overnight, we have  drawn a budget, let’s look at the Q1, 2024, it will still be turbulent, there is no gain saying that because it is going to be driven, not just by local factors but by external realities too.

“The economic projections all over the world are disturbing. So, there is no way it would not be though. But we are not situated on that formal economy. We also have some informal sector where people can get vibes, that is why we should be able to focus on reducing cost of food items.”

Also assessing the 2024 from the budget standpoint, Bismarck Rewane, another notable economist, agreed with Onyekpere, saying: “In the end, budgetary arithmetic, budgetary mathematics in economics is of no use to anybody except when by this time, in June 2024, we are buying rice at N40,000 per bag rather than N60,000, and a loaf of bread at N700 instead of N1,300.

‘‘The people are not interested in whether the budget is balanced and what the debt is.’’ 

For him, the main focus should be, “how does the budget affect the livelihood of the common man?”That is the key thing.” The World Bank lead economist for Nigeria, Alex Siernert, in his  recent remarks  on the current exchange rate and global oil prices, had said the pump price of fuel should be N750 rather than N650 as currently obtained. 

His words: “It does seem like petrol prices are not fully adjusting to market conditions so that hints at the partial return of the subsidy, if we estimate what the cost reflective price would be and assuming that importation is done at the official FX rate’’. 

He added that essentially, this means that contrary to what the government has made us believe, facts on the ground indicate that subsidies on petrol still exist.

Meanwhile, BMI, a Fitch Solutions company, in it’s recent forecast, indicated that Nigeria’s real GDP growth will increase modestly to 2.9% in 2024, up from 2.4% in 2023. 

According to the report, the operational start of the Dangote refinery in Q1’24 will lead to a sharp reduction in imports and increase the country’s trade surplus, providing tailwinds to economic growth.

However, it postulated that domestic demand will remain weak in 2024, with high inflation, tight financial conditions, just as fiscal constraints will continue to weigh on consumption and fixed investment.