A respected professional services firm, PricewaterhouseCoopers Nigeria has predicted that the Nigerian economy will recover fully in 2019.
PwC’s the analysts led by the Partner and Chief Economist, Andrew Nevin, noted that empirical evidence suggests that it takes one year for real Gross Domestic Product to recover to the pre-recession level. They added the all things being equal, Nigerian economy is expected to expand gradually in the next five years or more.
According to a report by the professional services firm, the economic growth would be majorly dependent on policies and reforms of the government.
“We expect real GDP to attain full recovery by 2019, with growth moving closer to its long-term trend of 6.7 per cent, “ the analysts said in the PwC report.
“After the economy bottoms, it could take about a year for real GDP to recover to pre-recession levels. Subsequently, the economy expands for a period, which could often exceed five years, depending on the structure of the economy and the reforms implemented.”
According to the National Bureau of Statistics’ second quarter Gross Domestic Product report, Nigeria has come out of recession, recording 0.55 per cent growth after contracting over five quarters.
NBS noted that the economic recovery was supported by a strong rebound in the oil sector which contributed 8.8 per cent to the GDP. In the non-oil sector, the economy was boosted by the strengthening of the manufacturing sector, reflecting the impact of improved foreign exchange liquidity.
PwC Nigeria cited the economic contraction the country experienced in 1991 as an example, saying Nigeria recovered to pre-recession levels after one year and experienced positive growth for another 24 years.
It explained that the subsequent years of boom was influenced by a combination increased oil revenue, a maturing political system, as well as accelerated reforms, which opened up the economy for sustainable growth.
PwC Nigeria said that Nigeria was on track to attain the estimated real GDP of 0.7 per cent in 2017 given that they had predicted that the economy would expand by 1.8 per cent year on year in the third quarter and 1.1 per cent year on year in the fourth quarter.
“We think this is plausible, given our expectation of a strong harvest season and sustained forex liquidity, which should support a broad-based economic recovery. Risks to our forecast include a decline in oil price and production, and policy disruptions, which could hamper investment flows to the economy,” it said.