Nigeria Needs Investments Worth N20 Trillion To Growth - PwC
In 2016, Nigeria's economy fell into a recession for the first time since 1991.
A lot of things contributed to this.
For more than two years, Nigeria earned less money from exporting goods and services – the most obvious one being the sharp drop in the oil price which meant government revenue plummeted.
More so, between 2007 and 2016, Nigeria's investment share of GDP declined from 18.7% to 12.6%, reaching the lowest level in the past twenty years.
But now that Nigeria is gradually dragging itself out the recession quagmire, one of the world’s top professional services firm, PwC has a piece of advice.
It must increase the share of its gross domestic product, GDP which it invests every year.
Currently, it stands at 12.6% - which will not do much good, according to PwC in an economic paper made available to Bounce News on Monday.
According to the paper titled: "Boosting Investments: Nigeria's path to growth", “Growth in Nigeria has been relatively strong at an average of 5.6% per annum over the past decade. However, this has been fueled by the oil boom and population expansion, rather than investments.”
It therefore advised that Nigeria must pursue an investment of at least 20 trillion naira every year, that is 20% of its GDP, in order for its economy to return to the path of growth.
“We find that Nigeria requires at least an investment of 20% of GDP per annum, far above the investment level of 12.6% of GDP in 2017.
“Today, this translates to an investment of 20 trillion Naira, reflecting that Nigeria would have to nearly double its current investment level.
“Assuming Nigeria maintains its most consistent run in investment growth, similar to the trend recorded between 1996 and 1999, investment to GDP could potentially increase by 2 percentage points a year. This suggests that Nigeria could attain an investment rate of 20% of GDP by 2021,” the paper said.