GDP Growth: Nigeria will shock IMF, BMO says

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Despite the International Monetary Fund (IMF’s) downward growth projection for Nigeria, the 2.9 percent economic growth projection by the Federal Government for 2020 is achievable, according to the Buhari Medi Organisation (BMO).

The IMF downward growth projection for Nigeria from its initial 2.5 percent to 2.0 percent, according to the Buhari Media Organisation (BMO), is off the mark.

In a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke, in Abuja,BMO acknowledged the IMF position which was arrived at after concluding its Article IV consultation to Nigeria, but added that Nigeria would shock IMF.

“They factor in obvious indicators that speak to weaknesses in terms of earnings, revenues and global trends, fueled by the CoronaVirus epidemic, which may indirectly affect Nigeria because of its impact on crude oil price that has hit economies around the globe.

“It is a known fact that before President Buhari took over in 2015, Nigeria was a mono-economy with its budget mainly based on the price of crude oil at the international market.
Nigeria is in the process of active diversification. We have over the past four years commenced the process of looking inward and that is slowly but gradually taking our economy away from being foreign dependent.

“The International Monetary Fund may have forgotten that Nigeria is diversifying its economy, thanks to President Buhari’s foresight that, it would be suicidal to rely entirely on revenue from oil to generate funds to bankroll the developmental programs of government.

“This informed his decision to tow the path of economic diversification with focus on the development of agriculture, solid minerals, science and technology, manufacturing and ICT.

“The Central Bank of Nigeria (CBN) which is the monetary policy authority of the nation has also been proactive in this new thinking. It has raised Loan-to-Deposit Ratio (LDR) of banks from 60 to 65 percent, principally to create more funds for credit to existing or new businesses,” the organisation said.

The CBN’s LDR has ensured that more than two trillion Naira credit has been created over the past six months. Businesses are being funded and capacity to produce has increased leading to rise in job creation. This will of course impact positively on our GDP.”

According to BMO, the Finance Act is also changing the economic environment, either in terms of growing new small and medium scale enterprises through tax exemption for companies that have less than N25 million annual turnover.

“That is huge and it enhances investment for development.

“Nigeria has shown progress, and considering the current policies’ deployments by the Federal Government, our GDP growth rate would increase and also improve our GDP to population growth ratio.

“A number of legacy projects like Lagos-Ibadan expressway, Kashimbila Dam and hydro power project, Dadin Kowa dam are scheduled to be concluded and commissioned before the end of 2020. Lagos-Ibadan rail line will be operational by the beginning of the second quarter of this year.

“All these will also have multiplier effects on the economy. We are moving away from being a foreign dependent economy by domesticating the capacity of our own economy which is important for growth,” it added.

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