The Nigeria Economic Outlook released on October 17 by PricewaterhouseCoopers International Limited has said that the country experienced some sectoral growth outside of the oil sector.
According to the PwC Outlook, in the Nigerian economic landscape, sectors demonstrating economic dominance boast activity levels reaching or surpassing N1 trillion.
These sectors are considered vital contributors to overall economic health. Conversely, sectors with activity levels below N1 trillion are classified as small sectors, representing a comparatively smaller economic impact.
Additionally, fast-growing sectors are identified by their impressive growth rates, exceeding 3%.
These sectors are pivotal in driving economic expansion and development.
On the flip side, sectors with growth rates falling below 3% are categorised as slow-growth sectors, signalling a need for strategic intervention to bolster their contributions to the economy.
The Outlook noted further that recently, the Nigerian Electricity Regulatory Commission (NERC) increased the prices of single-phase and three-phase metres by 39.7% and 31.1%, respectively.
This move aims to strike a balance between reasonable cost recovery for Metre Asset Providers (MAPs) and affordable pricing for consumers, ultimately ensuring a sustainable provision of meters.
As a result of the policy implementation, the utility sector experienced the highest growth at 31.8%, followed by financial services at 26.8%, information and communication at 8.6%, and construction at 3.4%.
According to Outlook, the surge in the utility sector is partly attributed to a 3.1% increase in the number of metered customers, totalling 5.47 million people.
On the other hand, the growth in financial services can be linked to increased interest income, digital transactions, and gains from forex revaluation.
Meanwhile, the information and communication sector saw a dominant growth of 8.6%, primarily due to heightened consumption of data services and a growing subscriber base.
These trends reflect the evolving landscape of energy accessibility and technology adoption in Nigeria, underscoring the ongoing efforts to ensure a balance between industry sustainability and consumer affordability.
The Outlook noted further that in the foreseeable future, inflation in Nigeria is anticipated to rise, driven by two main factors: the escalating costs of petroleum and the devaluation of the national currency.
This upward trend is expected to affect prices across various sectors, including food, transport, and non-food items.
One significant contributor to the expected inflation is the anticipated hike in petroleum product prices, correlating with the surge in international oil prices.
This increase will have a ripple effect on the inflation rates related to food, transport, and the core aspects of the economy.
Additionally, the lack of clear guidance regarding the foreign exchange (FX) policy and the unsettled backlog of FX obligations may persistently influence investor sentiment.
High FX rates, in turn, can lead to an overall increase in the cost of goods and services, potentially impacting business performance adversely.
Furthermore, businesses are likely to face losses due to a combination of factors such as rising interest rates, losses from currency devaluation, and various other challenges.
The pressure on net exports is expected to continue due to the unavailability of foreign exchange, adding to the economic challenges and necessitating strategic measures to mitigate these impacts.