LAGOS, SEPTEMBER 11, 2017 – The PricewaterhouseCoopers Nigeria has predicted a full economic recovery in the country by 2019.
According to analysts at the multinational consulting firm, empirical evidence suggests that it takes one year for real Gross Domestic Product to recover to the pre-recession level.
In a report on Friday, the analysts led by the Partner and Chief Economist, Andrew Nevin, said it was expected that the economy would expand gradually for the next five years or more.
However, it noted that the economic growth was 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, “ it said.
The National Bureau of Statistics’ second quarter Gross Domestic Product report indicated that the country had come out of recession, recording 0.5 per growth after experiencing negative growth for more than a year.
The report stated that the 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.
“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,” PwC Nigeria, said.
The firm 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.
The analysts 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.
PwC Nigeria said, “Empirical evidence suggests the economy is set for another long period of growth. Our 2017 GDP forecast remains unchanged at 0.7 per cent year on year.
“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.”