Nigerians’ Consumption To Hit N122trn in 2023
Nigerians are projected to spend N121.93 trillion in nominal consumptions in 2023 even as growth measured in Gross Domestic Product (GDP) is expected to drop to 3.75 percent in 2023 down from 4.39 percent projected in 2022.
In a public presentation of the 2023 FGN budget proposal in Abuja on Wednesday, the Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed that the estimate was based on changes in the components of GDP and historical performances.
This means that spending in monetary terms during the budget year will increase to approximately N122 trillion based on expected changes in economic activities in relation to those of the previous year’s 2022 budget.
In the current year, the country’s nominal consumption was projected at N119.28 trillion. But in view of changes in economic activities, the estimate was revised upwards at N120.17 trillion as of half year ended July 31, 2022.
Within the six months period, nominal GDP which was projected at N184.38 trillion rose to N198.93 trillion. However, the growth rate projection in GDP terms slowed down to 3.5 percent, as against the 4.20 percent projected growth rate.
This implies that consumption far outpaced production in the half year period of 2022 which is why the Federal Government expects sustained upward pressure on prices.
“Sustained upward pressure on prices is expected to be driven by the current and lag effect of the global price surge due to the Russia-Ukraine war, domestic insecurity, rising costs of imports, exchange rate depreciation, as well as other supply-side constraints,” the Finance Minister stated.
In the current year, Government’s assumptions missed all the parameters as seen in the indices presented by the finance during her public presentation.
The Minister said “Some of the parameters underlying the 2023 projections deviate from the projections in the National Development Plan (NDP) 2021-2025. They have been updated based on a combination of current realities and a modified medium-term outlook.
“For instance, the real GDP growth is projected at 3.75 percent in 2023 compared to 4.39 percent in the NDP. Growth is expected to moderate to 3.30 percent in 2024 before picking up to 3.46 percent in 2025. The inflation rate is projected to average 17.16 percent in 2023, and the 14.93 percent projected in the NDP for 2023,” Ahmed stated.
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