An Economist has said that the projections that the nation’s economy will grow above two per cent this year is unrealistic.
Former Chief Economist, Group Head, Research and Economic Intelligence Group, Zenith Bank Plc, Mr Marcel Okeke, while reviewing the nation’s economy, said it would grow less than two per cent in this financial year .
Speaking in Lagos at a programme organised by Finance Correspondents Association of Nigeria (FICAN), Okeke, who is now the Lead Consultant, Mascot Consult Limited, said in 2019, International Monetary Fund (IMF) projected that the economy will grow by 2.0 per cent, World Bank said 2.2 per cent and Central Bank of Nigeria (CBN) predicted 2.28 per cent, but it will not grow beyond 1.9 per cent.
Okeke also said in the current year, it is expected that the nation’s inflation rate would increase by 13 per cent by year end, adding that new year activities plus electioneering expenses will push inflation higher in the first quarter of 2019.
In his presentation, tagged “The Nigerian Economy: A Strategic Review and Outlook for 2019,” he said, in the second quarter, fallout from the election could reduce output and push up commodity prices and the naira depreciation would impact negatively on imported inflation while infrastructural development would be positive for output and inflation rate in third quarter.
On the exchange rate, he said in the first three months of the year, the increased speculative demand in foreign exchange market would put the local currency under pressure, stressing that while the country waiting for the game for the new cabinet, frequent intervention by the apex bank will stabilise the naira but deplete the external reserve.
He said that in the third quarter of the year, supplementary budget would likely increase demand for forex and post election adjustment in worst case scenario naira will slide by 10 per cent to N395 to a dollar.
Okeke further said as the Foreign Direct Investment inflows uncertainty wears of the naira will stabilize between N375 to a dollar and N380 to a dollar.
Speaking further, he said recovery of the economy in 2019 depends on internal factors which include payment of salary arrears and wage increment, increased purchasing power, stable foreign exchange rate, deepening mobile payment and maintenance and payment of outstanding Export Expansion Grant (EEG).
Other external factors that could affect the economy according to him include, signing of the Continental Free Trade Agreement, Maintenance of the economic Partnership Agreement (EPA), Full implementation of ECOWAS common External Tarriff and progress towards ECOWAS common currency in 2020.
