Nigeria’s Economy Still Very Weak, Says NESG
The Nigerian Economic Summit Group has said the Nation’s economy, which is on the path of recovery, remains very fragile. The Board of Directors of the NESG, in its first meeting in 2020, reviewed the global and domestic economic and financial environments, as well as the outlook for the rest of the year.
In a communique signed by its Chairman, Mr Asue Ighodalo, the board said, “While the economy remains on the path of recovery – with GDP growth at 2.3 per cent, the Nigerian economy remains very fragile through a combination of slow growth and vulnerability to changes in external conditions, especially oil price fluctuations.”
It noted that 10 out of the 46 sectors of the economy, contributing approximately 27.1 per cent of output, contracted in 2019, adding that a review of performance by the various economic sectors showed that the agricultural sector continued to grow slowly.
“While the service sectors, at 53 per cent, remained the largest contributors to output, growth in these sectors is adversely affected by issues which include rising incidences of insecurity and continuing closure of our nation’s borders,” the group said.
It noted that a combination of lower-than-anticipated oil prices and the cap on crude oil production by the Organisation of Petroleum Exporting Countries resulted in public revenue continuing to perform below expectations. “This has led to rising public indebtedness and budget underperformance,” the board said.
It commended the Federal Government for the enactment of the Finance Act, which “has the potential to significantly and sustainably improve fiscal transparency and effectiveness.” The NESG said the increase in Value Added Tax from five per cent to 7.5 per cent would improve non-oil revenue for the government.
“The NESG recognises the need to improve revenue performance at all levels of the public sector, but this must not be at the expense of investments and job growth,” it added.
On border closure, it urged the Government “to work expeditiously with our regional neighbours towards resolving the issues and reopening the borders as the adverse impact of border closure especially on trade, employment and cost are mounting.”
The group stressed the need for the country to do more to attract real investments into key sectors of the economy.