Economy
Nigeria’s Public Debt Projected to Soar to N70 Trillion Amidst Economic Reforms, Analysts Forecast Inflationary Pressures in H2’23
This unprecedented debt stock is expected to climb higher as the government implements significant reforms aimed at increasing its revenue base and fulfilling its promises
In a recent webinar organized by Meristem Securities Limited, financial analysts shed light on Nigeria’s economic landscape for the second half of 2023 (H2’23), revealing a projected surge in public debt, sustained inflationary pressures, and a marginal improvement in Gross Domestic Product (GDP).
The anticipated rise in Nigeria’s public debt portfolio in H2’23, reaching a staggering N70 trillion, was attributed to various factors, including the securitization of the N22 trillion ways and means balances.
This unprecedented debt stock is expected to climb higher as the government implements significant reforms aimed at increasing its revenue base and fulfilling its promises, necessitating continued borrowing.
Despite the challenging economic environment, the analysts expressed optimism regarding GDP growth, forecasting a moderate improvement of 2.94 percent.
This anticipated growth is predicated on increased business activities within the non-oil sector and the implementation of policies by President Bola Ahmed Tinubu’s administration, aimed at boosting oil production volumes.
However, alongside the positive GDP outlook, analysts cautioned that inflationary pressures would persist throughout H2’23 due to elevated food prices. Consequently, the Monetary Policy Committee (MPC) is expected to adopt a proactive approach by raising rates by 100 basis points.
Nevertheless, the analysts emphasized that the rate hike in the latter part of the year would be less aggressive compared to the first half of 2023.
Addressing the exchange rate, Mr. Sodiq Safiriyu, an Investment Research Analyst at Meristem, shared the firm’s forecast for the naira, estimating it to range between N779 and N786 per dollar by the end of 2023.
The webinar, titled “Tough start, bumpy road, propitious end,” aimed to provide valuable insights and strategic guidance for investment positioning during H2’23. As Nigeria navigates through economic reforms, investors and stakeholders are urged to remain vigilant and consider these projections when making financial decisions in the coming months.
Despite the challenges and uncertainties ahead, the experts at Meristem Securities Limited emphasized the importance of ongoing reforms, increased non-oil sector activities, and prudent fiscal policies in setting Nigeria on a path toward sustainable economic growth.