A review Nigeria’s economic performance in 2019

As 2019 draws to a close, the economic landscape of Nigeria is a topic of significant interest and concern. The Central Bank of Nigeria has projected a growth rate of 2.38% for the fourth quarter of the year, setting the stage for a review of the country's economic performance. Kyari Bukar, the former Chairman of the Nigerian Economic Summit Group, shared insights on key macroeconomic indicators and sectoral performances in a recent interview with CNBC Africa. Reflecting on the GDP projections for Q4 and the year as a whole, Bukar highlighted the challenges and opportunities facing Nigeria's economy. He noted that the average GDP growth for the year is expected to be around 2.2%, a slight improvement from the previous year's 1.9%. However, he raised concerns about the pace of growth, emphasizing that a GDP growth rate below the population growth rate of 2.6% would lead to a 'misery index' of increasing inflation and unemployment. One of the key sectors driving growth in Nigeria is oil and gas, which has performed well in recent quarters. Telecommunications and services have also shown positive trends, contributing to the overall GDP growth. However, other sectors such as manufacturing have faced challenges, with varying levels of growth and contraction. Bukar highlighted the impact of government policies, such as the border closure and restrictions on foreign exchange, on inflationary pressures. He noted that food inflation, in particular, has remained high despite expectations of a post-harvest decline. The recent uptick in inflation, reaching an eight-month high of 11.61% in October, has raised concerns about the effectiveness of current policies in addressing inflation. A key focus of the discussion was the Central Bank of Nigeria's policy on the Loan-to-Deposit Ratio (LDR) and its implications for credit growth and economic expansion. Bukar emphasized the importance of credit as an engine for economic growth, highlighting the positive impact of increased lending to the real sector. However, he also warned of potential risks of overheating the economy and creating inflationary pressures in the long run. Looking ahead, Bukar urged caution in navigating the complex economic landscape, particularly in light of uncertainties surrounding inflation, exchange rates, and policy impacts. He underscored the need for a balanced approach that promotes growth while mitigating risks of economic overheating and instability. In conclusion, while Nigeria's projected GDP growth of around 2.2% for 2019 represents an improvement from the previous year, there are lingering concerns about the sustainability and adequacy of this growth rate. As the country grapples with economic challenges and policy choices, stakeholders will need to adopt a strategic and cautious approach to ensure a stable and resilient economic trajectory for Nigeria in the coming years.