The Bureau disclosed this in its latest Economic Outlook and Review for 2016 Report recently released, projecting improving operational environment associated with current policy reforms by government to minimize wastages in public finance, fix decaying infrastructure and other fiscal and monetary initiatives, amongst other factors.
The NBS observed that the turmoil in global commodity markets which sagged commodity prices, the decision by US Federal Reserves (FED) on key interest rates and other developments in Euro zone, Indian and Asian economies and the implications for the Nigerian economy, all these had informed government to take hard decisions required to keep the economy on the path of sustainable growth.
According NBS,the crisis in the commodity markets which started in the second half of 2014 impacted negatively on the Nigerian economy in 2015 as oil prices fell 66.8 per cent from $114/barrel recorded in June 2014, to $38.0 by December 2015; and worse still falling to as low as $32.6 recently. In addition, it also reported that beyond commodity markets, recent developments in the global economy, including return of Iran to the global oil market as well as turmoil in the Euro zone which remains a key importer of Nigerian exports, amongst others, created a trifecta of headwinds that the nation has to contend with.
It added that the key fiscal measures enunciated in this year’s budget namely, government’s attempt to consolidate expenditure using the Treasury Single Account to plug leakages; proposed N1.6 trillion to be invested in capital projects, and other initiatives in particular in Power, Works and Housing; and the establishment of the Efficiency Unit to identify and surgically eliminate inefficiencies without hampering productivity all remained crucial to achieving economic growth.
it noted that the macroeconomic dynamics reseting may not yield fruits as quickly as Nigerians expect, at least in the near term, economic growth in 2016 was expected to increase to 3.78 per cent from 2.97 per cent in 2015, representing an increase of less than 100 basis points. However, the Bureau projected that beyond 2016 growth would be expected to jumpstart averaging 5.41 per cent yearly between 2017 and 2019 as infrastructure developments take shape and provide support for both the oil and non-oil sectors.
It clarified: “While upward pressure on inflation is expected, meaning that the Headline index may rise from 9.55 per cent to 10.16 per cent in 2016, rates are expected to moderate beyond this period and average 9.01% between 2017 and 2019.