Victor EzejaUtilities (read electricity industry), financial services, information & communication as well as construction have been identified to be the fastest growing sectors of the Nigerian economy this year. Their growth rates were respectively put at 31.8 per cent, 26.8 per cent, 8.6 per cent and 3.4 per cent.
This is according to the data released on Wednesday by the professional services firm, PwC Nigeria, which also projected a 2.8 per cent economic growth rate for Africa’s biggest economy in 2023 and three per cent in 2024.
In its latest Nigeria economic outlook released on Wednesday, PricewaterhouseCoopers said this marginal growth projection may be due to the emerging effects of the implementation of domestic fiscal reforms by the ministerial and economic management team of the country.
“The fastest growing sectors were utilities (31.8 percent), financial services (26.8 percent), information & communication (8.6 percent), and construction (3.4 percent),” the report said.
It explained that the growth in the activities of the utility sector may be partly attributed to the increase in the number of metered customers by 3.1 percent to 5.47 million people while an increase in interest income, digital transactions, and forex revaluation gains may be responsible for the growth in financial services.
Last year, Nigeria’s economy grew at a slower pace to 3.1 per cent in 2022 from 3.4 per cent the previous year, according to the National Bureau of Statistics (NBS).
The latest PwC report however revealed that real income is still under pressure as inflation (25.8 percent as of August 2023) continues to rise and the national minimum wage remains unchanged in the short term.
“In addition, input costs (including the year-on-year increase of 216 percent in Premium Motor Spirit from January to September) will continue to pass through to consumer prices further worsening the affordability of goods and services in the economy in the short to medium-term,” it said.
It added that a rise in energy, food, transportation, and import costs may dampen consumer spending on non-discretionary items.
“Capital reallocation from Nigeria’s economy may continue to impact foreign investment flows in the short to medium term. Investors may adopt a wait-and-see approach due to lack of forward guidance on Foreign Exchange policy.”
PwC Nigeria went on to point out that the unsettled issue of foreign exchange backlogs may lead to a scarcity of goods and inputs for manufacturing and trade leading to further increases in prices.
“Government spending will rise but continue to be constrained by debt servicing obligations and a huge fiscal deficit,” the report read.
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