Nigeria’s economy projected to have an upward trajectory in 2019

​published on March 26, 2019 | reading time: approx. 2 minutes

The Minister, Budget and National Planning, Senator Udoma Udo Udoma has expressed optimism about the Nigerian economy. It has been projected that Nigeria will continue on its recovery trend in 2019 with an expected rise in the real GDP of 0.8 per cent in 2017 to 2.1 per cent in 2018 and 3.01 per cent in 2019.

 
The Minister, who was speaking in Lagos said the proposed 2019 Budget is prepared to further strengthen the economy on the path of diversified and sustainable growth, and to drastically reduce the poverty percentile of its expanding populace. With the improved implementation of fiscal and monetary policies, improved oil export revenue, exchange rate stability, combined with the prudent management of foreign exchange reserves by the CBN, inflation should plummet to single digit of 9.98 per cent in 2019 from 11.44 per cent as at December 2018. It was emphasized that the 2019 Budget is another step in the country’s journey to ensure a wholesome national growth, creating jobs for the growing population and prosperity of Nigerians.

 
Due to the recovery of the country from recession, the current GDP growth is still sluggish, it however indicates a positive momentum, with particular attention being paid to the non-oil sector.

 
In defense of the oil price stipulations in the budget, the Minister explained that oil prices are dependent on the relationship between supply and demand for oil in international markets. Although there was a leap in the Crude Oil price in the second half of 2018 to US$81.20/b on September 24, 2018, it fell towards the last quarter of 2018, below the 2019 budget benchmark of US$60/b; although most analysts believe there will a bounce back over course of 2019. As a result, the benchmark price of US$60 has been maintained by the Federal Government. However, if at any time prior to the passage into law of the 2019 Budget, the benchmark price is unrealizable, there will be a review by the Executive to a lower price.

 
The Minister noted that increment of allocation for infrastructural projects will be insufficient for optimal national growth, which is why the Government is advocating for PPPs. To aid this initiative, Tax incentives are being implemented as evidenced by the signing of the Executive Order 007 on Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme by the President on January 25, 2019.
It was also emphasized that the Government will continue to provide better access to funding and supporting infrastructure to encourage SMEs, in particular. Government will also continue with the current emphasis on power, roads and rail.

 
Speaking about the minimum wage, the Minister assured that plans to increase minimum wage has been ingrained in the national budget. In addition, an exclusive competency based Technical Committee has been inaugurated by the Presidency to identify alternative sources of revenue to ensure that an increase in the wage bill does not stifle the implementation of other determined projects for the year. The Committee is expected to also to proffer solutions on strategies to implement any resulting wage adjustments in a way to reduce its inflationary effects.