The firm that has a worldwide presence through the member
firms and collaborating firms of Andersen Global disclosed this in its report
titled ‘Nigeria’s 2023 economic outlook’, which was presented by its partners
in Lagos.
The report read in part, “In 2022, the value of the naira
was relatively more stable in the official market than in the parallel market
thereby widening the premium between the two exchange rate windows. This was
due to the heightened demand pressure spurred by FX illiquidity.
“FX excess demand pressure is expected to continue in 2023
fuelled by varying factors such as elevated global interest rates attracting
portfolio investments away from Nigeria; a structurally import-dependent
economy; currency speculations if the gap between official and parallel market
rates are not closed; etc, which will make the naira to remain pressured in the
foreign exchange windows.
“Based on this, should the CBN continue to maintain the gap,
the official rate is likely to be devalued to about N500/$, while the parallel
market rate depreciates to about N900/$ by the end of 2023 unless mitigating
measures are taken.”
On the 2023 budget, it said the total revenue was estimated
to be N10.49tn and total expenditure was approximately N21.83tn, thereby
indicating a budget deficit of N11.34tn, a 39 per cent increase from the last
budget’s deficit of N8.17tn.
The deficit was expected to be significantly financed
through domestic borrowings, it added.
According to the report, “The Director-General of the Debt
Management Office stated that improvement in revenue generation serves as a
solution to the increasing debt profile. Despite the increase in government
income and expenditure altogether, the education and health sectors are still
underfunded.
“The rising inflation rate and the impact of the
Russia-Ukraine war on food and energy prices are factors likely to affect
Nigeria’s 2023 budget performance.”
It noted that the financial services sector grew by 12.7 per
cent in Q3, 2022.
The sector had also been driven by several factors such as
technology adoption, increasing population, increase in credit to the private
sector, the rise of the fintech industry, competitive landscape and government
reforms among others.
“Recent trends in the sector include a focus on digitisation
and adoption of new and emerging technologies, currency redesign and cash
withdrawal limits, bank and fintech partnerships, insurtech, etc,” the
statement said.
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