KEY POINTS
- Nigeria’s GDP could hit $400 billion by 2026.
- Inflation is expected to fall to 22%, boosting the economy.
- The naira may drop to N1,550 per dollar in the parallel market.
A bright future for Nigeria’s economy is anticipated, as its GDP is likely to hit $400 billion by the year 2026.
The prediction about this came from Bismarck Rewane, Managing Director of Financial Derivatives Company, at the Access Bank Customer Forum in Lagos. He estimated that the economy would increase by 3.5%, which would reinforce Nigeria as the second-largest sub-Saharan African economy.
According to Punch, Rewane noted that this growth is a result of a better foreign exchange system, which will keep the country’s currency stable and raise foreign reserves to $20 billion.
“The Nigerian economy will grow at 3.5% ($400 billion),” Rewane indicated, adding that the efficacy of its forex system would improve.
The expert pointed out that with inflation forecast to fall to 22%, the Monetary Policy Rate (MPR) is likely to fall to 20%. The adaptations will minimize the burden of poor loans on banks and supply relief to companies dealing with elevated interest costs.
Problems encountered in the Foreign Exchange Market
Rewane commented that there could be difficulties for the naira going forward. He predicts that by 2026, the exchange rate of the parallel market will weaken to N1550 per dollar, mostly because of remittances and changes in exchange rate policies. Rewane continues to be cheerful about the overall economic trajectory of Nigeria.
He also estimated that total factor productivity would leap from 2.4% to 2.6%, concurrently with the nation’s trade balance at $9.3 billion.
Predicting the effects of boosted production from the Dangote refinery and modular refineries, Rewane said petrol prices would be around N900 per liter in the domestic market.
People in Nigeria could anticipate an uptick in food costs, as a basket of tomatoes might reach N20,000, a bag of rice N75,000, and a bag of beans might sell for as high as N110,000 by 2026.
While Nigeria’s economy is on a growth path, challenges like inflation and currency devaluation remain. Rewane’s insights highlight both the opportunities and hurdles ahead for Africa’s largest economy.
