TUE, DEC 26 2023-theGBJournal| While the Nigerian economy remains on a positive growth path in 2023FY, economic activities have been underwhelming due to a plethora of factors, including the cash crunch induced by the CBN’s naira redesign drive, electioneering activities, PMS subsidy removal, and lingering currency pressures further triggered by the FX liberalisation in the review period.
The preceding weighed on the non-oil sector’s growth even as the Finance & Insurance, Telecommunications, and Trade sub-sectors were the star performers of the overall non-oil sector in the review period.
Meanwhile, the oil sector remained on the backfoot as crude oil production remained underwhelming, averaging 1.39mb/d as of 9M-23 (9M-22: 1.37mb/d | 9M-21: 1.63mb/d).
Overall, Cordros Securities anticipate the economy will grow by 2.54% y/y in 2023FY.
In 2024FY, Cordros expect real GDP growth to settle higher than in 2023FY (-1.61% y/y) as they estimate that the oil sector’s growth will increase faster, in line with a
recovery in crude oil production, amid the favourable base effects from the prior year.
Elsewhere, as the impact of government reforms normalises, the non-oil sector is expected to grow slightly higher relative to 2023FY, supported by the Services sector.
Overall, Cordros expects the oil sector to grow by 12.55% y/y and the non-oil sector to grow by 2.79% y/y.
Consequently, their forecast is a GDP growth of 3.32% y/y in 2024FY.
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