Nigeria’s economic growth prospect may be moderated by late passage of the 2019 budget, Institute of Chartered Accountants of Nigeria (ICAN) President, Rasak Jaiyeola, has said.
He spoke during the institute’s economic discourse series titled, ‘2019 economic outlook’ held in Lagos.
He explained that growth in sub-Saharan Africa is expected to pick up from about 3.1 per cent in 2018 to 3.8 percent in 2019.
“This however would still be a far cry for stimulating the expected jobs to meet the demand of the growing population in the region. The growth prospects for Nigeria may be moderated with the likely late passage of the 2019 budget, sluggish investment decisions that may arise as a result of expectations from the general elections, the security challenges in the country, projected relatively low crude oil prices in the global market and other uncertainties that may be caused by the general elections and developments in other trading economies with the country,” he said.
According to Jaiyeola, said the extent to which the proposed 2019 budget would stimulate growth in the economy, what strategies there are for building human capital and the appropriateness of the percentage of budgetary allocation to the educational sector, modalities for addressing the rising unemployment rate in the country, finding a lasting solution to the security challenges and innovative approaches to restoring the agricultural sector to its pride of place in the country remain topical issues in the economy.
Jaiyeola explained that there are divergent views on the growth prospects across countries and regions for 2019.
While the projections for some were encouraging, he said others had been predicted to experience some downward spiraling in the year.
He added that the world economic outlook by the International Monetary Fund projected a global growth of 3.5 per cent in 2019 and 3.6 per cent in 2020, which represented 0.2 and 0.1 percentage fell below the 3.7 per cent average growth in 2018.
In sub-Saharan Africa, he added, growth was expected to pick up from about 3.1 per cent in 2018 to 3.8 per cent in 2019.
He said this, however, would still be a far cry for stimulating the expected jobs to meet the demand of the growing population in the region.
According to him, the programme creates a platform for accounting and non-accounting professionals as well as other economic watchers to do a dispassionate critique of the major indices of growth and development in the economy.
Over the years, he added, the programme had made significant contributions to various social, financial and economic issues influencing the country’s growth experience.
He said, “Through these series and other knowledge events of the institute, we have made profound contributions to budget planning process, banking reforms, tax and fiscal management, forensic, financial technology and corporate governance among several others. The recommendations that emerged from past series had served as important policy tool for government at all levels and other stakeholders in the economic value chain.”
Also speaking, Chief Executive Officer, Economic Associates, Ayo Teriba explained that a global commodity supply glut since mid-2014 has depressed global commodity prices and eroded Nigeria’s export earnings. The slump in export revenues inflicted a shortage of foreign exchange liquidity that meant businesses could not get enough foreign exchange to fund vital imports.
This, he added, triggered a recession, and precipitated a devaluation, which in turn created inflationary pressures. Dim commodity price outlook implies continued pressures on foreign exchange liquidity, with concomitant growth and stability challenges for Nigeria.
Continuing, he said: “Foreign resource inflows into Nigeria have remained a one-track affair as exports account for the bulk of inflows into the country, while non-export inflows are small and stagnant.