What will drive Nigeria’s economy in 2022?

Nigeria's economy has shown glimmers of hope in 2021, with growth rates surpassing initial projections. Bismarck Rewane, CEO of Financial Derivatives, provides insight into the trajectory of the Nigerian economy moving into 2022 and highlights the risks that need to be navigated. Despite the positive growth, there are concerns surrounding key sectors such as oil and agriculture. Rewane notes that while some sectors are expanding, others are contracting, particularly in areas crucial for the country's economic stability, such as the export-driven oil industry and food-producing agriculture sector. The imbalance in sector performance has led to challenges such as high food inflation and less favorable foreign exchange rates. As the year draws to a close, it is evident that Nigeria is on track for modest growth, but uncertainties loom, particularly with the upcoming elections. The impact of external factors, such as global demand fluctuations and new COVID-19 variants, also pose potential risks to the economy in 2022. Rewane emphasizes the need for policy measures to address these challenges, citing looming decisions on subsidies, budget allocation, and electoral spending as critical factors that could shape Nigeria's economic landscape in the coming year. Additionally, uncertainties surrounding fiscal stability, inflation rates, and interest rates further compound the economic outlook for Nigeria in 2022. With a focus on maintaining macroeconomic stability and navigating potential disruptions, policymakers will need to implement strategic measures to support sustainable growth and mitigate risks in Nigeria's economy.