Macroeconomic Report & Economic Updates

The National Bureau of Statistics (NBS), in its Selected Food Prices Watch Report for March 2023, has stated that prices of food items such as beef, yam, beans, etc., witnessed increases in March 2023.

The prices of key energy products – petrol, kerosene, cooking gas, and diesel – have increased significantly in March 2023 compared to their respective levels in March 2022. According to NBS, the average price of petrol increased by 42.63 percent from N185.3 per litre in March 2022 to N264.29 in March 2023. Similarly, the average retail price of refilling a 5kg cylinder of cooking gas rose by 22.03 percent from N3,778.3 to N4,600.57, while the average retail price of diesel increased from N539.32 to N836.81 (55.9 percent) over the same period.

Electricity demand increased in Q3 2022, as the National Bureau of Statistics (NBS) report shows.
Specifically, the report showed that total customer numbers increased by 1.20 percent from 10.81 million in Q2 2022 to 10.94 million on monthly basis. However, on yearly basis, the total customer numbers declined in Q3 2022 by 1.19 percent from 11.07 million in Q3 2021.

The International Monetary Fund (IMF) has retained Nigeria’s economic growth projection for 2023 at 3.2 percent in its recent world economic outlook update, titled “A Rocky Recovery,” for April 2023. However, the IMF increased the country’s economic growth projection for 2024 to 3.0 percent from the 2.9 percent it specified in its January update, which implies that growth will slow down by 0.2 percent in 2024, from 3.2 percent recorded in 2023.

As  of  the  end  of  December  2022,  Nigeria’s  total  debt stock stood at N46.25 trillion, comprising 40.4 percent (N18.7  trillion)  in  external  debt  and  59.56  percent (N27.55  trillion)  in  domestic  debt,  according  to  data from  the  Debt  Management  Office  (DMO)1. This represents  a N6.69  trillion  (16.9  percent)  increase over the  N39.56  trillion  recorded  for  December  2021  and  a 4.96 percent (N2.18 trillion) rise in the fourth quarter of 2022.  The  increase  in  debt  stock  is  a  result  of  new borrowings to fund budget deficits, and the issuance of promissory notes to settle government liabilities, which consequently  increases  the  country’s  debt  obligations and servicing costs. For instance, the debt to GDP ratio has  now  increased  to  23.20  percent,  and  the  debt  per capita  stands  at  N213,430  (using  a  population  of  216 million2 people). The steady and significant increase in Nigeria's  total  debt  stock,  despite  remaining  below  the limits  of  55  percent  suggested  by  the  World  Bank  and IMF, 70 percent suggested by ECOWAS, and 40 percent self-imposed,  raises  serious  concerns  about  the sustainability  of  the  country's  debt  and  its  fiscal vulnerability due to low revenue generation, ineffective diversification  of  sources  of  income,  and  constant exposure  to  shocks  in  the  global oil  market.  Therefore, the government should seriously consider slowing down debt  purchases,  particularly  for  non-investment expenditures. Additionally, measures that would lead to an oil output increment should be taken, such as reviving the incapacitated refineries’ infrastructure and reducing revenue  leakages.  Hence,  economic  diversification should be a top priority for the government to increase revenue  generation  and  lessen  reliance  on  debt  to  pay government expenditures.