The new year 2023 is projected to be one of mixed expectations for the Nigerian economy. Economic experts say while the economy is expected to maintain the current growth trajectory around the 2022 third quarter figure of 2.25 percent, it would be difficult to expect a higher growth rate in 2023, especially in the first and third quarters.

The International Monetary Fund (IMF) had lowered its growth projection for the Nigerian economy to 3.0 percent in 2023, representing a 0.2 percent cut from the 3.2 percent earlier projected for the economy. The World Bank also lowered its growth forecast for the Nigerian economy in 2023 to 3.2 percent from 3.3 percent earlier projected.

The issues that are expected to slow down the country’s economic growth in the year are uncertainties emanating from the coming general elections, existential supply chain bottlenecks occasioned by domestic widespread insecurity, inflationary pressure, slowdown in global economy, the Russia-Ukraine war and declining demand for China-made commodities through renewed curbs on China over lingering coronavirus outbreak.

The year 2023 is a transition year from one administration or political party to another. As usual, politicians, including those in government, have shifted focus to electioneering campaigns either for themselves or preferred candidates. That means governance would be relegated to the background while the economy suffers.

That’s why experts say the current poverty level, inflationary pressure, high cost of living and fuel scarcity, among others, would persist for the rest of the year.

Except in very few states, infrastructural development by way of roads and bridges construction has drastically dropped. Many of the construction companies have either cut workforce or are currently not at work due to little or no release of funds for execution of projects.

“Because fiscal development would be very low in the next one year due to change of baton from one government to another, it should be expected that purchasing power index will drop and economic activities slow down,” said Bunmi Shogunle, analyst.

Uncertainty is bad for investors. In the first quarter of 2023, local and foreign investments, especially portfolio investments, are expected to take a flight due to fear of the unknown. Business owners always prefer to hold back investments and watch the outcome of the elections and pare it with the political blueprints of the person who eventually wins.

Through that, they would be able to know if the new candidate at the centre has plans that would guarantee safe climate for businesses to thrive. Outcome of the general elections will also have direct impact on transactions on the Nigerian stock market and prices of securities.

Businesses are watching what policy options would be adopted by the next president with particular reference to subsidy regime and implementation of the Petroleum Industry Act (PIA) that was deferred by the Muhammadu Buhari-led current government.

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In the 2023 budget, the federal government has provided for two prevailing scenarios, according to Zainab Ahmed, minister of finance, budget and national planning.

“Scenario 1 – the Business-as-Usual scenario: This assumes that the subsidy on PMS, estimated at N6.72 trillion for the full year 2023, will remain and be fully provided for,” Ahmed said.

“Scenario 2 – the Reform scenario: This assumes that petrol subsidy will remain up to mid-2023 based on the 18-month extension announced early 2021, in which case only N3.36 trillion will be provided for.”

Implementation of the 2023 national and most sub-national governments’ budgets will suffer setback. The Buhari-led government is not expected to undertake impactful implementation of the budget that would come up in the twilight of the administration.

On the other hand, it would take the incoming government at least six months to study the books and settle down for governance.

The power sector is expected to record some improvement in 2023 through the Siemens project, a joint venture between the federal government and the German power company Siemens that aim to modernize Nigeria’s power sector.

From 2023, the world is expected to mass-produce green energy that would be cheaper and much cleaner than fossil fuels. That will require innovation, creativity, teamwork and industrial revolution, especially in Nigeria and other nations in sub-Saharan Africa to catch up with 2023 national of the rest of the world.

But would that be possible? Business owners and experts say the next Nigerian president would determine the direction of the nation’s economy.

“A well determined government would first of all scrap fuel subsidy and provide incentives to vulnerable Nigerians to cushion the effect,” said Stephen Kanabe, an economic expert.

Nigeria is looking to cut down carbon emission or flaring to a very low level in the year. Many expect Nigeria and the rest of Africa to take the issue of climate change seriously by making policies that would discourage use of plastic bottles and nylons.