By Newsshelve Correspondent.
The Centre for the Promotion of Private Enterprise (CPPE) has released its 2024 economic review and 2025 outlook, highlighting Nigeria’s economic resilience in the face of intense macroeconomic headwinds.
According to the CPPE, Nigeria’s Gross Domestic Product (GDP) grew at 2.98% in the first quarter, 3.19% in the second quarter, and 3.46% in the third quarter, with projections indicating a possible closing rate of 3.6% for the year.
“This growth rate is at par with the International Monetary Fund’s (IMF) forecasts for GDP growth in sub-Saharan Africa, which stands at 3.6%, and surpasses the global GDP forecast of 3.2%” the CPPE noted.
The service sector has been the main driver of growth, with the financial services sector leading the pack with a 32% growth performance in the third quarter.
However, the real sector has experienced subdued growth, with agriculture posting a GDP growth of 1.14% and manufacturing growing at 0.92% in the third quarter.
The CPPE expressed concern over the huge disparities in growth between the financial services sector and the rest of the economy, which reflects the growing decoupling of the financial services sector from the real economy.
“The current reality is that investing in financial instruments has become more profitable than investing in the real economy, with lower risks. This is not consistent with Nigeria’s economic aspirations, as it discourages real sector investment,” the CPPE stated.
The Centre also highlighted the need to address the productivity and competitiveness challenges of the non-oil sector, which contributes significantly to GDP but has limited contribution to foreign exchange earnings.
In its outlook for 2025, the CPPE predicted that the exchange rate would remain stable, driven by expectations of sustained improvement in foreign reserves, improved accretion to reserves, and the positive impact of the $2 billion Euro Bond proceeds on reserves.
The Centre also warned of potential inflationary pressures in 2025, driven by key drivers such as high energy costs, exchange rates, transportation costs, and high interest rates.
In conclusion, the CPPE emphasized the need for policymakers to address the challenges facing the Nigerian economy, including the huge disparities in growth between the financial services sector and the rest of the economy, and the productivity and competitiveness challenges of the non-oil sector.
The Centre’s Director/CEO, Dr. Muda Yusuf, noted that “the Nigerian economy has shown resilience in the face of macroeconomic headwinds, but there is a need for policymakers to address the underlying challenges to ensure sustainable growth and development.”
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