PricewaterhouseCoopers has identified seven factors that will define Nigeria’s economic terrain this year.
On Thursday, the business presented its Nigeria Economic Outlook Report in Lagos.
It stated that the trends to watch for this year included implementing fiscal reforms, which involves balancing ambition with budgetary implementation.
Other factors include adjusting monetary policy to ensure price stability through appropriate frameworks and instruments.
PwC stated that by 2024, sectors development would be improved as a result of reforms, and consumers would likely respond better to changing policy and macroeconomic realities.
It also predicted that the year would remain vulnerable to external forces, with the possibility of’shocks’ and undulating pathways to unlocking productivity in the economy, while investors would be cautiously hopeful.
The company stated that the country’s debt stock may stay elevated in 2024 as the government seeks to cover the deficit with more borrowings.
It also stated that debt sustainability would be a key pressure point in 2024.
“In 2024, notwithstanding the instruments used by the Central Bank of Nigeria (CBN), inflationary pressures may remain high in the short run.
“To succeed, the Central Bank of Nigeria (CBN) must pursue inflation targets independently, with a focus on inflation control and financial stability.
“Uncertainty in foreign exchange environment may continue in 2024 if supply challenges persist,” according to the report.
It went on to say that investor trust in Nigeria is dependent on the credibility of governance and consistent policy implementation.
According to the corporation, institutional efficiency and clear policy communications are critical for assessment and market predictability, both of which influence investment decisions.
“The interplay between governance, policy implementation, institutional behaviour, and communication will partly shape the overall assessment for investors in 2024,” according to the report.
According to PwC, the country’s GDP could expand modestly by 3.1% as a result of ongoing policy reforms, although growth prospects may be hampered by elevated economic pressures.
It predicted that inflation will fall moderately, weighing the effects of reforms, policy actions, external pressures, and food prices.
“Consumer spending may recover in the second half of the year as inflationary pressures subside.
“The expected enhanced stability in the foreign currency market in the second half of the year may reduce the imported cost of raw materials and finished goods.
“The small fall in inflationary growth may result in a slight reduction in Selling, General, and Administrative (SG&A) expenses in the medium run.
“Continued tightening of monetary policy rate may keep borrowing costs elevated in the short term,” it went on to say.
The organization reaffirmed its commitment to helping clients and its network comprehend macroeconomic, megatrends, and Environment, Sustainability, and Governance (ESG) development that affect the local and global scene.
