Revamping Nigeria’s growth strategy

The World Bank has revised Nigeria's growth projections for 2024 to 3.3 per cent from the previous 2.9 per cent estimate. This increase comes amid discussions of a $3.3 billion oil-for-cash loan deal with the Nigerian National Petroleum Company Limited. Johnson Chukwu, CEO of Cowry Asset Management, joined CNBC Africa to delve into Nigeria's growth strategy and potential economic outlook. Chukwu highlighted the need for substantial growth in key sectors like agriculture, trade, manufacturing, and oil and gas to achieve a robust growth rate in 2024. The discussion also touched on attracting investment, managing the FX crisis, and the importance of improving foreign exchange cash flow to address arrears effectively. Let's dissect the key points discussed in the interview: 1. **Current Economic Growth Scenario**: Chukwu analyzed the GDP growth figures from 2023 and expressed skepticism about Nigeria achieving the 2.9 per cent growth projected by the IMF and World Bank. He cited growth rates ranging from 2.31 per cent to 2.54 per cent in different quarters of 2023, resulting in an average growth rate of around 2.4 to 2.45 per cent. Looking ahead to 2024, Chukwu emphasized the critical role of sectors like agriculture, trade, manufacturing, and especially the oil and gas sector in driving significant growth. 2. **Attracting Investment and Asset Classes**: The conversation shifted towards investment inflows and the composition of capital importations in Nigeria. Chukwu referenced data from the Nigerian Bureau of Statistics, highlighting that only $654.65 million entered the economy in Q3, with a considerable portion allocated to other investments and loans instead of foreign direct investments. He stressed the importance of long-term capital inflows and the necessity of aligning investments with key sectors for sustainable growth. 3. **Addressing the FX Crisis and Arrears**: Chukwu provided insights into managing Nigeria's FX crisis, pointing out the short-term borrowing measures being used to tackle FX backlogs. He emphasized the need to enhance foreign exchange cash flow through increased exports, particularly focusing on crude oil production. Chukwu noted that sporadic loans are insufficient to address the substantial arrears, underlining the urgency of consistent cash flows from exports for a sustainable solution. As Chukwu concluded the discussion, he underscored the government's imperative to boost production to improve the country's economic fundamentals and effectively address lingering challenges. Through a focus on enhancing key sectors, attracting the right investments, and optimizing foreign exchange management, Nigeria can pave the way for more robust and sustainable economic growth. With strategic considerations and concerted efforts, Nigeria's economic landscape holds the potential for positive transformations and enhanced resilience amidst global economic shifts.