The achievement 6 percent average gross domestic product (GDP) growth rate by Nigeria in four years, may not be feasible, KPMG has said.
This is contained in a KMPG flashnote entitled ‘Prospect for Attaining 6% Average Growth Rate in 4 years’, released on Friday, where it said the target “might be difficult to attain” within the timeframe set by the president.
Bola Ahmed Tinubu in his inaugural speech on May 29, set a target to increase the GDP growth rate of the country by 6 percent on average in the next 4 years through budgetary reforms aimed at stimulating the real sector of the economy.
Stated KMGP in the flashnote: “For example, the consensus analysts is a GDP growth in 2023 of between 2.7-3.2%. Thus, if we assume a GDP growth of 3% in the first year, the economy will then have to grow by an average of 7% for the subsequent 3 years and moving growth from a forecast 3% in 2023 to at least 7% in 2024 and afterwards seems overly ambitious”.
KPMG said attaining a 6 percent real GDP growth on average from 2023 to 2026 meant growing the value of real GDP from N74.6 trillion in 2022 to N92.5tn by 2026, representing an increase of N17 trillion in four years.
The professional services firm explained that within 12 years (2010 and 2022), real GDP grew by about N17 trillion which would have to be replicated in just four years and within a much more challenging macroenvironment that cut across the fiscal, monetary, external, and real sectors.
KPMG, however, said that while the 6 percent target was unlikely to be achieved, the best possible GDP growth rate to be achieved within the next four years would be between 4 to 4.5 percent.
Noted KPMG: “In conclusion, while we expect stronger year on year growth over the next few years, we are of the opinion that there is very limited space to attain a 6% average real growth rate in four years or an increase in real GDP by N17trillion.
“We are of the opinion that an average GDP growth rate of between 4-4.5% at the best is more feasible in the next four years.
“Even this will require the country to get its policies right and keep consistent faith with macroeconomic reforms”.
