For Nigeria to regain its Africa’s biggest economy status, the handlers of the economy must continue to rethink strategies, realign priorities and stress-test institutional readiness for rebound and growth.
This advice was given by an economist and Group Managing Director of TL First Group, Dr. Olu Olasode, in response to Daily Trust’s enquiry on why South Africa overtook Nigeria as Africa’s largest economy.
The International Monetary Fund’s Gross Domestic Product (GDP) forecasts for 2016 are 0.1 per cent for South Africa and -1.8 for Nigeria. In the first quarter of 2016, Nigeria’s GDP plummeted to -0.36.
Dr. Olasode said Nigeria is currently facing the most prominent recession in 33 years and warned that there was a high probability that the country would experience lower growth rate, further magnified by the weaker naira against the dollar.
He pointed out that analysts at TL First Group had earlier predicted that Nigeria’s economy would grow slower because of the wrong parameters initiated at the beginning of the year, plunging the nation further into recession.
Dr. Olasode, however, expressed optimism that Nigeria would regain its position as the largest economy, adding that the actual growth would normalise after some time.
The Head of Department of Economics, University of Abuja, Professor Sarah Anyanwu, blamed Nigeria’s slip as Africa’s giant economy to fall in revenue arising from fall in oil price being Nigeria’s major source of income; unstable and unfavourable exchange rate, which has inhibited investments, increased inflationary pressure and reduced value of the naira following import dependency.
She blamed the development on slow pace of transition from the last election leading to poor public spending, slow pace of governance, slow budget implementation and public policies particularly in critical sectors, lower output in almost all the sectors of the economy, including issues of misappropriation and embezzlement of funds during the last administration.
“Recently we are battling with shortfall in oil production instigated by militants in the South South,” she added.
