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The cash shortage crisis that spooked the Nigerian economic atmosphere in the first quarter has been projected to have adverse effects on economic growth expectations, analysts projected ahead of the release of economic data by the National Bureau of Statistics.
In the fiscal year 2022, Nigeria’s gross domestic product increased by 3% yearly, representing a slowdown compared with the 3.4% increase reported in 2021.
In about 8 years under the present administration, Nigeria’s GDP growth record has not been impressive in a nation where government feeds more than 200 million people with imported goods and services.
“We forecast that Nigeria’s economy will expand by 2.3% in 2023, down from an estimated 3.1% in 2022. This slowdown will be concentrated in the first half of 2023 as high inflation and cash shortages weigh on domestic economic activity”, Fitch Solutions said in a new report.
The firm also suggests that a subdued outlook for oil production will also weigh on growth over the year. It said the central bank’s decision to demonetise high-value naira notes has prompted acute cash shortages in Nigeria.
“This has contributed to a sharp slowdown in private-sector activity as disruptions to payments and commercial operations transmit through the wider economy.
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