Nwani: Nigeria’s GDP growth still in low range

Nigeria's economy has been grappling with low growth rates in recent years, with the latest GDP figures revealing a meager 3.19% growth rate in the second quarter. Vincent Nwani, the Strategy Leader for West Africa at Safrik Investments Group, highlighted that the country's growth has been far below the levels seen between 2000 and 2014, where growth rates ranged from 5% to 15%. The challenges facing Nigeria's economy are multifaceted, including the impact of the recession, COVID-19, and continued policy uncertainties. One of the key concerns raised by Nwani is the ambitious target set by the current administration to reach a GDP of one trillion by 2026. To achieve this target, Nigeria would need to substantially increase its growth rates to well over 20%, a feat that seems increasingly unattainable given the current economic climate. While some sectors, such as the financial services industry, have shown growth, critical sectors like manufacturing and agriculture continue to lag behind, hampering overall economic progress. A major impediment to Nigeria's economic growth is the lack of structural reforms and the presence of 'monsters' holding back the economy, according to Nwani. These include issues like foreign exchange volatility, high inflation rates, and challenges with transparency and ease of doing business. The exit of multinational companies from Nigeria in recent years has underscored these systemic issues, with factors like insecurity, FX volatility, and regulatory hurdles cited as primary reasons for their departure. Another pressing issue plaguing Nigeria's economy is the staggering debt owed by the Nigerian National Petroleum Company Limited (NNPC) to international petrol suppliers, amounting to over $6.8 billion. Despite initial denials by NNPC, the admission of this debt raises concerns about transparency and financial management within the company. This debt, coupled with Nigeria's existing debt burden of over 121 trillion Naira, poses a significant risk to the country's financial stability and foreign reserves. Looking ahead, the prospects for Nigeria's economy remain uncertain, with challenges around debt repayment, FX volatility, and economic reforms looming large. The need for greater transparency, investor confidence, and decisive policy action is paramount to stimulate growth and attract much-needed investments. As Nigeria navigates these complex economic waters, addressing the structural deficiencies and implementing bold reforms will be crucial to reviving growth and ensuring long-term prosperity.