Wednesday, September 20, 2023
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Ambitious Target of N100 Trillion Annual GDP by President Tinubu Faces Scrutiny from Financial Firms

President Bola Tinubu’s ambitious plan to achieve an annual Gross Domestic Product (GDP) of N100 trillion in four years has been met with skepticism by prominent financial and investment firms. FBNQuest, United Capital Limited, PFI Capital Limited, and Commercio Partners Limited have voiced their concerns, describing the target as unrealistic but potentially attainable with a well-defined economic roadmap focused on the agriculture and manufacturing sectors. They emphasize the need for robust implementation driven by appropriate fiscal and monetary policies.

In his inaugural speech, President Tinubu outlined a GDP growth target of six percent per annum, aiming to achieve it through budgetary reforms, domestic manufacturing, and reduced importation. However, data from the National Bureau of Statistics reveals that Nigeria recorded a real annual GDP of N75.768 trillion in 2022, representing a growth rate of 3.1 percent compared to the previous year.

Financial Vanguard’s analysis suggests that achieving the 6.0 percent growth target would increase the annual real GDP to over N100 trillion by 2027. However, considering Nigeria’s historical trend, investment analysts remain doubtful about the feasibility of Tinubu’s goal. The average GDP growth rate in the eight years after 2014 was 1.36 percent, indicating the challenges in achieving a substantial increase.

While the financial firms acknowledge the ambition of the target, they stress the necessity of a focused roadmap centered on agriculture, industry, and manufacturing. They propose that the agricultural sector grows between 5 percent and 8 percent, while the manufacturing sector should aim for growth between 8 percent and 20 percent to drive overall economic expansion.

To attain the 6 percent GDP growth rate, the government must prioritize sectors such as agriculture and industries, addressing barriers impeding their growth. In particular, insecurity poses a significant challenge to the agricultural sector, hindering farming activities and leading to the destruction of farmlands and crops. The analysts also highlight the importance of fiscal and monetary policies, including increased government spending, tax reforms, public-private partnerships, subsidies, lower interest rates, and targeted credit facilities to stimulate economic growth.

However, while the financial firms acknowledge the potential for achieving the target, they remain skeptical given the current economic conditions and the need for effective policy implementation. They stress the importance of clarifying the strategies and plans to realize the 6 percent GDP growth rate. Ultimately, the success of President Tinubu’s ambitious goal hinges on a comprehensive and well-executed economic roadmap that addresses key sectors and implements suitable fiscal and monetary policies to drive growth and overcome existing challenges.



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