Post-election’s policies will drive growth

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Voting word cloud

Nigerians should expect post-election adjustment with a renewed focus on policies that will drive economic growth in fourth quarter of 2019, an economist, Mr Marcel Okeke, has said.

Okeke, a former Group Head, Research and Economic Intelligence Group, Zenith Bank, spoke at an Economic Review and Outlook discourse organised by the Finance Correspondents on Thursday in Lagos.

The topic was: “The Nigerian Economy: A strategic Review and Outlook for 2019.”

He said that the inflation outlook was expected to be at 13 per cent by year end because of the new year activities and electioneering expenses.

According to him, it can push it higher in the first quarter of 2019.

The economist also said that fallout from the elections could reduce output and push up commodity prices, while naira depreciation could impact negatively on imported inflation by the second quarter.

In the third quarter, he added that infrastructure development would be positive for output and inflation rate.

Okeke cautioned against external imbalances that could arise from the drop in oil revenue, shortfall in diaspora inflows, capital flight and currency which could be under pressure.

He believed that in the first quarter of 2019, the exchange rate might witness speculative demand in forex market which could put naira under pressure.

Okeke said that it could be stabilised in the second quarter due to frequent foreign exchange intervention by the Central Bank.

The expert, however, believed that all these could deplete the nation’s external reserves.

According to him, there may likely be a supplementary budget as well as increased demand for foreign exchange and post-election adjustment, which is imminent in the third quarter.

The economist said that the fourth quarter might experience steady Foreign Direct Inflow as uncertainty veers off and the naira stabilises between N375 to N380 per dollar.

On trade outlook, he said that recovery in 2019 depends on internal and external factors.

Okeke said the external factors were signing of the African Continental Free Trade Agreement and maintenance of the Economic Partnership (EPA).

Others include full implementation of ECOWAS Common External Tariff and progress toward common currency in 2020.

He also listed the internal factors to include payment of salary arrears and wages increment which was ongoing.

Others were increased purchasing power, stable foreign exchange rate, mobile payment depending, and maintenance payment of outstanding Export Expansion Grant (EEG).