One of the leading research firms, FSDH Research, has projected a growth of 3.16 percent for Nigeria.
In its report released on Monday, January 22, FSDH said in 2018, the nation’s real Gross Domestic Product (GDP) will increase by 3.16 percent in 2018 and 4.09 percent in 2019.
“Our forecast for 2018 is slightly higher than the forecast of the World Bank and International Monetary Fund (IMF) of 2.5 percent and 2.1 percent respectively,” the report said.
However, with the population growing at 2.75 percent, the country requires growth rate in excess of 5 percent to substantially improve the wellbeing of Nigerians.
Agriculture, Trade, and Mining & Quarrying sectors, with forecast growth rates of 4 percent, 2 percent and 3.2 percent would drive the 3.16 percent growth rate in 2018, it said.
Continuing, the firm said other leading sectors of the economy that would contribute to the growth are Information and Communication (I&C), 2.2 percent; Real Estate, 2.5 percent; Construction, 4 percent and Manufacturing, 1 percent.
Agriculture, with a growth of 3.06 percent; Mining and Quarrying with 25.44 percent and Other Services with 1.72 percent were the three leading sectors that contributed to the growth rate of 1.40 percent recorded in Q3 2017.
It said the increase in the supply of foreign exchange has improved economic activities across other sectors of the Nigerian economy.
FSDH Research said it has observed increased activities in Agriculture, Mining and Quarrying (oil and gas), manufacturing, Trade, Real Estate and I&C in the last few months.
The growth in the equity market has created additional wealth that would stimulate effective demand in the economy. Some light manufacturing activities are also taking place – stimulating demand for raw materials from Agriculture.
The current oil price will encourage investment activities in the oil and gas sector. Trade sector would also benefit from the increase in consumer purchasing power, it said.
FSDH Research noted that there are downside risks to the forecast growth. The rising social unrest in some parts of the country may affect economic activities and lead to escalating inflation rate.