PwC Nigeria Highlights 7 key Trends to Reshape Nigerian Economy in 2024

PwC Nigeria has highlighted seven key trends that will shape the nation’s economic trajectory in 2024.

This was contained in PwC latest Nigeria Economic Outlook report. The report projected a marginal decline in inflation and 3.1 per cent rise in GDP and noted that achieving sustainable growth in 2024 requires balancing ambitious fiscal reforms with effective budget implementation. It also stresses the importance of aligning fiscal and monetary policy to stabilise prices and reach target goals.

Shaping the Nigerian economic outlook in 2024, the report noted that Nigeria’s ambitious revenue targets for 2024 depend heavily on oil prices and reform implementation.

It said:  “Central Bank of Nigeria (CBN) has deployed several monetary policy tools and instruments to achieve price stability. Despite the deployment of monetary policy tools, the inflationary pressure has persisted. To succeed, the CBN must independently pursue inflation goals, emphasising inflation control, and maintaining a stable financial system.

It emphasised that, “foreign portfolio investment flows to the capital market may remain cautious due to residual challenges. Investors’ outlook may be dampened by downgrades from FTSE Russell and MSCI, specifically due to delays in capital repatriation.

“Despite this, Moody’s, Fitch, and S&P maintained a speculative credit rating due to drawbacks on reforms and several fiscal challenges that persist. FDI flows are expected to improve in 2024 driven by notable expansion in the growing ICT and Manufacturing sectors.

The report stated that “limited fiscal space for public investment and difficulty attracting private investments constrain the ability to make essential infrastructure improvements. Infrastructure funding may remain insufficient in 2024. Despite increased spending, insecurity remains a challenge and jeopardises national stability, negatively affects economic activities and undermines investor confidence.”

It pointed out that geopolitical, economic, environmental, political and trade trends will shape the dynamics and outlook for the Nigerian economy in 2024, saying that, “if the Russia-Ukraine war intensifies, it could lead to increased global energy and commodity supply risks. Nigeria may experience increased inflation and food security challenges due to grain import disruptions and high petroleum product cost. The outcome of elections in several countries globally, especially USA, UK, and Taiwan may shape the dynamics of trade and capital flows around the world in 2024.”

PwC added that, “consumer spending may be pressured in 2024 due to rising prices of goods and services (increasing food and transportation costs), coupled with lower disposable income. However, private consumption is expected to be marginally better than 2023. Poverty levels are projected to increase to 38.8 per cent in 2024. Despite the low unemployment rate in the country, low consumer spending and purchasing power remains an issue, especially in the absence of commensurate increase in minimum wage to mitigate the inflationary growth in the economy.”

It further said: “GDP may grow marginally by 3.1 per cent in 2024 on the back of sustained policy reforms. The growth projection is driven by ongoing reforms, recovering oil production, and a proactive policy environment.”