Productivity in the Nigerian economy is likely to fall in the next four years, according to a new report by the Economist Intelligent Unit (EIU), contradicting government�s projection for the same period.
According to the report, Gross Domestic Product (GDP), which is the total of goods produced in an economy, will drop to 6.6 percent in 2009 from 7.0 percent in 2008. The report also shows that the real GDP will further drop to 6.6 percent in 2009 and 6.3 percent in 2010.
However, EIU, the intelligence arm of The Economist magazine, estimates that economic growth to remain stable at 6.2 percent in 2011 and 2012 respectively. The EIU report represents about 40 percent downward review from estimates on growth made earlier by the Federal Government over the same period.
Government had predicted a swell in growth for the four years beginning 2008 in its growth blue print – NEEDS 2. According to the plan, the economy would buoy by 10.7 percent in 2008, 10.5 percent in 2009, 11.50 percent in 2010 and 11.70 percent in 2011.
Economists say the real GDP should remain robust at over six percent per year between 2009 and 2012. They believe that the government will make progress with economic reforms and expect growth in the non-oil sector to remain strong during the forecast period.
One of the key tests for the new administration, they reasoned, will be the way President Umaru Yar�Adua and his vice-president, Goodluck Jonathan, handle the complicated issue of the ongoing unrest in the troubled Niger Delta region. The region is the target of much new expenditure in the 2008 budget, “but a lot will depend on how effectively this is used.”
“The new government is expected to announce a detailed economic policy document in the near term: early indications are that any new policy will not differ greatly from the National Economic Empowerment and Development Strategy (NEEDS), which expired at the end of 2007,” the report stated.
Government expects to stir the economy to compete among the 20 largest economies in the world by the target year of 2020.
However, the report states that exceptionally high export earnings will result in current-account surpluses in 2008-12, despite strong growth in imports and invisible debits. Foreign direct investment, mainly in the oil sector, will remain high over the forecast period, at over US$2 billion per year.