Nigerians could be in for more economic woes, as a reputable accounting firm, PwC Nigeria, has projected more hardship for the populace, regardless of the proposed wage increment, which they say may not be made simultaneously and proportionately.
In its recent report captioned ‘Nigeria Economic Outlook for August 2023, published on Friday, the multinational firm also forecast an increase in the higher cost of doing business and lower revenue for Nigerian businesses due to the impact of recent economic reforms by the Tinubu government.
PwC’s projection warned that the continued inflationary growth and rise in the cost of living may slow real economic growth in the medium term, noting that the purchasing power of consumers would drastically reduce.
The report read in part, “Consumer spending may be adversely impacted by the elevated inflation rate (food 25.3 percent and core inflation 20.3 percent rates) and fuel price (140 percent increase after subsidy removal).
“Business revenues may decline in the short term, mainly due to direct input costs and a reduction in disposable incomes.
“Risks in energy, food, transportation, and import costs may dampen consumer spending on non-discretionary items.”
The report added that economic reforms such as FX market liberalization could gradually attract foreign investments and boost capital inflows in the long term.
According to PwC, in the short run, investors will likely adopt a wait-and-see approach, which may be a result of the absence of further reforms to strengthen business and economic fundamentals.
It read further, “Inflation is expected to rise in the short to medium term.
“Consumers are expected to be pressured by higher prices, causing demand to slow down.
“Wage adjustments are unlikely to be adjusted simultaneously and proportionately.”
The report also noted that naira floating was expected to drive up the cost of imported raw materials, adding that the naira value since the implementation of the policy had ranged between N472/$ and N771/$ from an average of N463/$ in May before the policy announcement.
It was further noted that the proposed new ministerial cabinet would drive economic direction and fiscal policy management.
