Professional services firm, PwC Nigeria, has projected that Nigeria’s inflation would decline to about 29.5 per cent by the end of the year.
This projection is higher than what the Central Bank of Nigeria disclosed in January, which was projected at 21.4 per cent.
In its latest Nigeria economic outlook, titled ‘Navigating economic reforms,’ PwC “projects a marginal decline in inflation to 29.5 per cent by year-end, balancing the effects of reforms, policy actions, external pressures and food prices; particularly in the second half of the year.”
Also, it anticipates that the Gross Domestic Product may grow marginally by 2.9 per cent on the back of sustained policy reforms although growth prospects may be limited by elevated economic pressures.
In terms of fiscal sustainability, the report said that concerns may remain slightly elevated, given debt servicing costs (89 per cent of the budgeted fiscal deficit is to be financed by new borrowings).
As of the end of the first quarter, Nigeria’s total public debt has reached N121.67tn, increasing by N24.33tn or 24.99 per cent within three months, the Debt Management Office announced.
This new figure is from a total debt of N97.34tn ($108.23bn) as of December 2023.
The report read, “Nigeria’s total public debt stood at N121.67tn ($91.46bn) as of March 31, 2024. The comparative figure for December 31, 2023, was N97.34 trillion ($108.23bn). Total Domestic Debt was N65.65tn ($46.29bn) while total external debt was N56.02tn ($42.12bn).”
The report went on to call on the government to “Prioritise macro stability by addressing security, social and pressure points of inflation and exchange rate pressures. Adopt scenario planning before any major economic reform is implemented to avoid unwarranted policy reversals e.g. cyber security levy.
And for businesses, PwC analysts urged the creation of “a clear-eyed strategy by revisiting your strategy and be clear on your must-haves to win in the future – regardless of any economic scenario.
“Re-visit your entire cost structure to establish short, mid, and long-term actions to fundamentally adjust for the future.”