NESG launches 2024 macroeconomic outlook report

Nigerian Economic Summit Group (NESG) has presented the 2024 private sector macroeconomic outlook with the theme “Nigeria’s Private Sector in Turbulent Times: Mitigating Risks and Positioning for Economic Transformation”.

The chairman of the board of directors of the NESG, Mr Niyi Yusuf while delivering the opening remarks, said that since the Nigerian economy rebounded from the recession induced by the pandemic, its growth has remained fragile and vulnerable to the slightest shock,

Yusuf noted that the country’s economic landscape has been marked by a turbulent and uncertain economic environment stemming from a confluence of internal and external factors.

He said that in 2023, Nigeria grappled with a multifaceted nature of economic challenges including the cash crunch and economic disruption emanating from the stern implementation of the naira redesign policy which devasted businesses and the economy as a whole.

Yusuf reiterated that the brisk implementation of strategic reforms – sporadic removal of fuel subsidies and exchange rates alignment – further constrained the operating environment and performance of businesses, suppressing overall economic outcomes.

Furthermore, the NESG Board of Directors Chairman stated that the subdued private sector performance in 2023 is evident in the Purchasers’ Manager Index (PMI) fluctuation below the 50-point threshold of expansion and contraction of economic activities, noting that Nigeria witnessed an unprecedented surge in the inflation rate, reaching an 18-year high of 28.9 percent in December 2023 as a result of amplified constraints emanating from fuel subsidy removal, escalating logistics costs, and naira depreciation, all of which significantly raised business operating costs and impeded overall productivity.

“The private sector has experienced slow growth due to the tough reforms and policy inconsistencies in recent years; encountering challenges, including regulatory complexities, legislative hurdles, and predatory behaviours from public officials. Also, the inhibiting factors such as pervasive insecurity, inadequate infrastructure, high informalities, proliferation of non-actors, poor human capital outcomes, and weak market and corporate governance have adversely affected the business environment,” Mr Yusuf stated.

The chairman of the NESG also noted that recent development strategies and governmental initiatives have recognised this important role of the private sector and emphasised nurturing, advancing, and fostering private sector development as a pivotal catalyst for successful economic transformation.

In her goodwill message, the Director-General, of Lagos Chambers of Commerce and Industry (LCCI), Dr Chinyere Almuna said that the theme reflects the present economic landscape considering that the year 2023 presented challenges marked by the rigorous implementation of demonetisation policies, widespread insecurity, and a fiercely contested general election, aggravating preexisting macroeconomic and structural issues and that these challenges significantly impacted Nigeria’s socio-economic landscape and macroeconomic performance.

Almuna noted that the theme reflects the current economic landscape characterized by its uncertainties and presents a way to understand the multifaceted challenges that have impacted the private sector and its ability to create jobs, generate revenue for the government, and thrive.

She noted that Nigeria is at a transformative juncture and we must harness the opportunities in the organized private sector because the sector accounts for 98 percent of total GDP and are responsible for 80 percent of annual investment which makes them suitably placed to address the country’s economic challenges, optimise the nation’s potentials and achieve vital objectives.

While delivering a presentation on the 2024 private sector macroeconomic outlook, Chief Economist and Head of Research and Development, NESG, Dr Olusegun Omisakin, said that the macroeconomic performance is affecting business players, noting that Nigeria was previously a 400 billion dollars economy in 2022 which reduced to 356 billion in 2023 and that the private sector productivity remains very weak. He stated that the major challenge the organised private sector faces is the high cost of production and the ease of doing business across the country.

Furthermore, Dr Omisakin noted that the organized private sector particularly battled with inflation all through 2023 and the NESG 2024 private sector macroeconomic outlook report highlights strategies such as product diversification, technology for innovative marketing, market research and customer insight, cost optimisation, supply chain diversification, regulatory compliance, edging exchange rate risks, and contingency planning as some of the strategies that can be adopted by different sectors to help the Nigerian economy bounce back through a more agile and responsive private sector.