Macroeconomic Instability Driving Nigeria’s GDP Decline, Says Expert

A renowned analyst, Dr. Muda Yusuf, while providing a path towards resetting Nigeria’s fledgling economy, stressed that, there is an urgent need to put in place reforms and intervention measures to curb the country’s Gross Domestic Product (GDP) decline.

Reacting to the Q3, 2022 GDP report, Yusuf observed that, the Nigerian quarterly real GDP growth dipped to 2.25 per cent in the third quarter of 2022, from 3.54 per cent in the second quarter.

This growth decline, he noted, reflects the diverse headwinds that have been bedeviling the Nigerian economy.

These headwinds include: the macroeconomic instability, heightening inflationary pressures, currency depreciation, foreign exchange illiquidity, surging energy cost, weakening purchasing power, legacy structural constraints, lingering insecurity, and crippling trade facilitation issues.

The GDP report indicated sectors that expanded, those that slowed, others that contracted and sectors that plunged into recession.

Proffering solutions, Yusuf, who is the chief executive officer (CEO) of the Center For The Promotion Of Private Enterprise (CPPE), said, to better fix the economy and address sectors that are in recession, sectors that slowed and those that have contracted, there is a need to put in place reforms and intervention measures.

In his recommendation, he said, government should strive to fix the macroeconomic headwinds of high inflation and currency volatility as well as address the structural impediments to production and other economic activities.

He also recommended reforming the foreign exchange market to inspire investors’ confidence, and in particular address the challenges of insecurity and logistics.

He further stated the need to tame inflation and boost purchasing power of the citizens, accelerate the implementation of the Petroleum Industry Act.

In addition, he called for reform of the monetary policies to facilitate financial deepening in the economy, create support for small businesses to promote economic inclusion, accelerate efforts to ensure domestic refining of petroleum products and specifically carry out reforms which prioritise infrastructural development and transparency in the budgetary process.