NBS: Q3 GDP growth reflects base effect impact

Nigeria's National Bureau of Statistics recently released a report attributing the 4.03 percent GDP growth rate in the third quarter of 2021 to base effects, highlighting Africa's largest economy's growth trajectory when compared to the negative growth rate in Q3 2020. CNBC Africa hosted a discussion with Andrew Nevin, Chief Economist at PwC, and Tilewa Adebajo, CEO at CFG Advisory, to delve into the implications of this report. Both experts expressed optimism about the country's economic prospects. Tilewa Adebajo commended the positive trajectory of Nigeria's economic recovery post-COVID induced lockdown recession. He highlighted the growth across various sectors, with financial services showing a notable 23 percent increase. Adebajo emphasized the need for fiscal authorities to focus on structural reforms, including addressing challenges such as fiscal deficits, inflation, and unemployment to sustain the current growth momentum. Andrew Nevin echoed Adebajo's sentiment, underscoring Nigeria's resilience compared to other global economies amid the pandemic. Nevin expressed his optimism for the Nigerian economy, citing potential underestimation of economic activity due to a significant informal sector. He pointed out the real estate sector as a crucial driver of employment and economic expansion, calling for a focus on enhancing infrastructure and simplifying tax structures to boost growth. Both experts emphasized the necessity for the government to address critical pressure points, including reviewing debt service, reducing subsidies, and unifying the foreign exchange rate. They underscored the urgency for simplifying tax systems, reducing bottlenecks at ports, and improving policy consistency to facilitate business operations and enhance competitiveness. In discussing the role of the Central Bank of Nigeria, Adebajo advocated for further rate cuts to sustain economic growth. He highlighted the influx of foreign investments, particularly in startup ventures, with expectations of attracting over $2 billion this year. Adebajo emphasized the significance of supporting the burgeoning startup ecosystem, noting its potential to drive value creation and employment generation, particularly among the youthful demographic. The experts' insights shed light on the positive outlook for Nigeria's economic landscape, emphasizing the need for comprehensive reforms and strategic interventions to capitalize on the current growth momentum. As Nigeria navigates challenges and embraces opportunities, stakeholders are urged to prioritize structural adjustments and policy enhancements to foster sustainable growth and economic resilience in the post-pandemic era.