Nigeria’s Economy to Grow at a Subdued Pace in 2023 – CBN

The Central Bank of Nigeria (CBN) has said Nigeria’s economy would grow at a subdued rate in 2023 following a series of weak economic fundamentals.

The apex bank stated in the communique no 146 of the monetary policy committee signed by Godwin Emefiele, the Governor of the central bank, and obtained by Investors King.

According to the committee, global economic uncertainties heightened by Russia’s invasion of Ukraine, Covid-19 cases in China, rising interest rates and the surge in commodities prices are expected to spill over given Nigeria’s economic structure as a commodity-dependent nation.

Also, Nigeria’s rising inflation rate ahead of general elections is one of the factors that will weigh on growth in 2023 while the high unemployment rate, foreign exchange scarcity, and waning consumer buying power amid slowing new job creation are estimated to compound Nigeria’s woes.

On Tuesday, the monetary policy committee raised borrowing costs by 100 basis points to 17.5% from 16.5% despite the nation’s slowing growth. Nigeria’s economy grew at 3.54% in the second quarter of 2022 before slowing to 2.25% in the third quarter of 2022.

While there were reports that Electricity distribution companies (DisCos) have silently increased tariffs by as much as 19% since December 1, 2022 even with the fuel scarcity.

The Socio-Economic Rights and Accountability Project (SERP) on Monday filed a lawsuit against President Buhari over “the failure to reverse the unlawful, unjust, and unreasonable increase in electricity tariff, and to probe the spending of public funds as ‘investments and bailouts’ to DisCos and GenCos since 2005.”

Similarly, there are plans to remove fuel subsidy by the second half of 2023 in order to rein in expenditures and boost revenue.

All this at a time when the unemployment rate and earnings are at a record low, Naira to the dollar exchange rate at N750/$1 on the parallel market and manufacturing activities slowdown due to forex challenges would hurt growth in 2023.