The Southwest Economic Outlook abstracts from the projected dynamics in global and domestic economies in 2022 to underscore the potential implications for the Region. Based on a ‘top-down’ approach, the outlook pitches the plausible regional equivalent of global and domestic economic experience.
From a twin perspective, the Outlook suggests important strategies to position the Region against any impending shocks in the world economy. First, it is quipped that the Region should hedge against the prospective negative consequences of tightened global financial space due to the pandemic. Second, the Region should prepare itself to take advantage of the investment windows provided by these dynamics.
Ostensibly, the global narratives have been dominated by COVID-19 Pandemic discourse such as the fourth wave, vaccination, new variants, etc; as countries strive to cushion the effects of increased economic uncertainties compounded by the long-term effects of the global short-down.
The probable effects of this on the Region include reduced access to foreign borrowing due to the expectations of tightened global financial conditions, higher costs of external borrowing which would debar the states from taking this financing route, low volume of FDI inflow into the Region and by extension into the country, etc.
From the domestic perspective, the analysis of the Nigerian economy and the performance of 2021 approved budget shows a rise in the national budget with a corresponding rise in the percentage of debt servicing. This raises the need to seek alternative revenue generation such as fiscal efficiency. The Nigerian economy has been projected to grow by 4.2% in 2022 but this economic outlook is hinged on several factors such as the implementation of the national development plan (NDP, 2021-2025), fuel subsidy and Dangote Refinery narratives, the FOREX market and the level of insecurity, among others. The economy is thus susceptible to sub-optimal performance whenever these fundamentals change.
As a buffer, the Region should leverage regional competitive advantages and shared opportunities to create developmental roadmaps that will reposition the Southwest as a OneBloc investment destination in the country and accelerate comparative development across the constituent states. One of such is to leverage on development of transportation infrastructure to open up the region for investment.