Despite a 3.19% year-on-year GDP growth in the second quarter of 2024, many Nigerians, especially economists, remain concerned about the country’s economic trajectory.
While the oil and non-oil sectors drove growth with increases of 10.15% and 2.80% respectively, critical areas like agriculture and manufacturing—which are key employers of labor—showed minimal gains. Agriculture recorded only a slight growth of 1.41%, while manufacturing declined from 1.49% to 1.28%.
Analysts argue these figures reveal underlying economic challenges. Otunba Francis Meshioye, President of the Manufacturers Association of Nigeria (MAN), expressed worry over the persistent high costs affecting businesses, shrinking profitability, and limiting the sector’s impact on GDP.
Small business owners, particularly those reliant on petrol, are feeling the strain as fuel prices soar, with no viable alternatives in sight.
Makinde Adams, a Lagos-based fashion designer, and Ahmed, a vulcanizer in Alimosho, described their struggles with rising costs and dwindling customer bases. For many, the escalating price of petrol, now over N1,000 per liter, is making it difficult to maintain operations. Some businesses, unable to pass on the increased costs to consumers, are being forced to shut down.
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Esther, a grocery vendor in Ota, also highlighted the price volatility in the agricultural sector, which has reduced her ability to restock products like yam. Public Affairs Analyst Adebisi Adesuyi from Wealthgate Advisors emphasized that Nigeria’s economic challenges are unprecedented, with inflation exceeding 33%, unemployment over 30%, and a growing poverty rate.
Adesuyi argued that the floating of the naira, currently at N1,650 to $1, has significantly raised production costs. He suggested that stabilizing the currency, reducing fuel prices, and implementing strategic monetary and fiscal policies could alleviate the economic strain.
Dr. Paul Alaje, Chief Economist at SPM Professionals, echoed these concerns, advising the government to peg the naira at N1,000 temporarily to stabilize prices. The MAN also recommended interventions in growth sectors like agriculture, manufacturing, and ICT, as well as licensing artisanal refineries in oil-rich areas to curb illegal bunkering and create jobs.
The Lagos Chamber of Commerce and Industry (LCCI) called for increased agricultural funding, improved credit access for agro-processing, and measures to tackle the high cost of production. LCCI President, Gabriel Idahosa, emphasized the need for targeted support in manufacturing to enhance productivity and competitiveness.
While experts and stakeholders offer various solutions to revive the economy, the challenge remains whether authorities will implement these measures to ease the burden on Nigeria’s struggling small and medium enterprises (SMEs).
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