PWC projects 2.9% growth for Nigeria, expects marginal decline in inflation to 29.5%

PricewaterhouseCoopers (PWC) has projected a 2.9 per cent growth for Nigeria in the current year, fueled by sustained policy reforms. However, the consultancy firm has advised that economic pressures could limit the growth potential. PWC also anticipates a slight decline in inflation to 29.5 per cent by the end of the year. The economists at PWC have outlined three key considerations for the government, focusing on structured and targeted policies, policy flexibility, and mitigation strategies. Olusegun Zaccheaus, Partner and West Africa Lead at PWC, offered insights during an interview with CNBC Africa, presenting an overview of their outlook for Nigeria. Zaccheaus highlighted the impact of economic reforms on both growth and inflation. He emphasized that while the government's policy interventions are expected to pave the way for medium to long-term structural growth, short-term challenges may hinder immediate economic prospects. The expected growth rate for 2024 is around three per cent, with a slightly more optimistic outlook for 2025 and significant improvements anticipated from 2026 onward. Zaccheaus underscored the importance of sector-specific reforms, such as those in the oil and gas industries, in driving sustainable growth across various sectors of the economy. In addressing inflation, Zaccheaus pointed out the dual influence of supply side factors and monetary policy on inflation dynamics. He noted that while food production challenges have been a major driver of inflation, monetary interventions are expected to help curb the inflation rate. The recent deceleration in the inflation rate is a positive sign, and Zaccheaus projected a further slowdown by the end of 2024, provided external shocks are contained. Discussing the three key considerations for the government, Zaccheaus emphasized the need for targeted sector-specific policies to complement broader macroeconomic reforms. He stressed the importance of assessing potential policy impacts on the private sector and implementing robust contingency plans to mitigate adverse effects. Additionally, Zaccheaus highlighted the necessity of implementing mitigation frameworks to support vulnerable segments of the economy, including low-income households and firms, in adapting to policy shocks. Measures such as social interventions and tailored support for SMEs are crucial in cushioning the impact on these sectors. As Nigeria navigates through economic challenges, Zaccheaus urged the government to enhance policy implementation and flexibility to foster sustainable growth and mitigate adverse effects on the most vulnerable segments of society. In conclusion, Zaccheaus emphasized the importance of timely and strategic policy interventions to steer Nigeria towards a path of stable economic growth and inflation control, despite prevailing economic pressures.