Nigeria’s Inflation Predicted to Fall to 29.5% by End of 2024, GDP to Rise Marginally to 2.9%: PwC Report


Nigeria’s headline inflation is projected to decrease to 29.5% by the end of 2024, while the country’s gross domestic product (GDP) is expected to increase slightly to 2.9%, according to a new report by PwC.

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In its economic outlook for the second half of the year, titled “Nigeria Economic Outlook: Navigating Economic Reforms,” the multinational advisory and tax services company highlighted that the projected decline in inflation would alleviate economic pressure and balance the impacts of ongoing market reforms.

“PwC projects a marginal decline in inflation to 29.5% by year-end, balancing the effects of reforms, policy actions, external pressures, and food prices, particularly in the second half of the year,” the report stated.

Inflation rose from 22.41% in May 2023 to 33.95% in May 2024, driven primarily by increases in food, utilities, and transportation costs. Food inflation surged to 40.6%, utility inflation reached 29.6%, and transportation inflation climbed to 25.6%, significantly reducing the disposable income of Nigerian workers.

“The rise in food inflation was due to low agricultural productivity, poor logistics, and insecurity in the food-producing regions of the country,” the report explained. “Utilities inflation was driven by higher costs for rent, electricity, water supply, and other fuels, while transportation inflation resulted from increased petroleum product prices, including PMS.”

These inflation and exchange rate pressures have diminished the real value of household disposable income and consumption expenditure, exacerbating a pronounced cost-of-living crisis.

PwC noted that despite the Central Bank of Nigeria’s efforts to control inflation, it continues to rise, reaching a 28-year high.

The report also forecasted a marginal GDP growth for Nigeria, driven by sustained policy reforms. “GDP may grow marginally by 2.9% on the back of sustained policy reforms, although growth prospects may be limited by elevated economic pressures,” it stated.

In the first quarter of 2024, Nigeria’s GDP grew by 2.98%, up from 2.31% in Q1 2023. This growth was attributed to improvements in the financial and insurance sector (from 21.37% in Q1 2023 to 31.24% in Q1 2024) and the mining and quarrying sector (from -3.96% in Q1 2023 to 6.30% in Q1 2024).

To achieve these projections, PwC advised the government to prioritize macroeconomic stability by addressing security, social, and inflationary pressures. The report emphasized the need for capital mobilization through market-focused policies, investment promotion, and strategic sectoral investments focused on exports, domestic substitution, and job creation.

“Government must drive fiscal prudence by optimizing spending on capital projects with the highest ROI, rationalizing public service spending, and improving revenue diversification and collection efficiency,” PwC recommended.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247news
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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