By Rukayat Moisemhe
The Centre for the Promotion of Private Enterprises (CPPE) says the Nigerian economy, in spite of intense macroeconomic headwinds in 2024, exhibited resilience on account of Gross Domestic Product (GDP) performance.
Founder, CPPE, Dr Muda Yusuf, made the assertion in the centre’s “Nigeria 2024 Economic Review and 2025 Outlook Report” on Monday in Lagos.
Yusuf noted that while the GDP grew at 2.98 per cent in the first quarter, 3.19 per cent in the second quarter and 3.46 per cent in the third quarter, it might close the year at about 3.6 per cent.
According to him, this is at par with forecasts for GDP growth for the sub-Sahara Africa and better than global GDP forecast of 3.2 per cent.
On sectoral performances in the year, Yusuf noted that while the service sector continued to dominate growth performance, that of the real sector remained subdued.
He explained that the implication was that sectors with high job creation potential and prospects for economic inclusion struggled.
“This situation needs to be reversed to fix the current high unemployment and reduce poverty.
“The huge disparities in the growth of financial services and the rest of the economy showed a disconnect and exemplified the failure of financial intermediation role of the financial services sector in the Nigerian economy.
“There is a need for appropriate policy measures to correct the huge disparity in the profitability of the real economy and the financial economy,” he said.
The CPPE boss, reviewing the oil and non-oil sectors’ performances, said from a structural perspective, the non-oil sector continued to dominate the economic space, contributing 94.43 per cent to GDP in Q3.
He, however, noted that the economy was characterised by a paradox of the oil sector contributing an estimated 90 per cent of foreign exchange earnings while the non-oil sector accounted for about 10 per cent.
This, Yusuf said, was another dimension of a structural shortcoming in the economy that needed to be addressed.
“It is noteworthy that the non-oil sector contribution to revenue has improved markedly in recent times.
“This data reflects the enormous productivity and competitiveness challenges of the non-oil sector of the Nigerian economy.
“The policy implication is that more should be done to fix the challenges of productivity and competitiveness of the non-oil sector of the economy.
“Most of these challenges are the structural issues, infrastructural challenges, funding constraints, regulatory issues and the general macroeconomic headwinds,” he said.
On foreign exchange, Yusuf noted that from July to December, the rate had largely stabilised, informed by the series of regulatory reforms and the periodic intervention by the Central Bank of Nigeria (CBN) in the market.
He said the outlook for the exchange rate in 2025 was on the upside based on sustained improvement in foreign reserves which is currently in excess of $40 billion dollars.
He added that the rate would be on the upside, hinged on improvement in accretion to reserves on the back of improved inflows from the IMTOs and diaspora remittances.
Yusuf said improved capacity of the CBN to moderate rate volatility through periodic intervention would improve the market alongside the positive impact of the $2 billion Euro Bond proceeds on reserves.
“Other dynamics to improve the country’s foreign exchange rate in 2025 include the successful domestic dollar bond of $500 million, clearance of legacy obligations of about $7 billion by the CBN.
“Also, the import substitution effect of the Dangote and Port Harcourt refineries will consequently ease off demand pressure on the foreign market and the gradual recovery of non-oil export sector,” he said.(NAN)
