Prominent economist and Managing Director of Financial Derivatives Company, Bismarck Rewane, has expressed skepticism over the current administration’s goal of transforming Nigeria into a $1 trillion economy within the next five to six years.
Rewane made his remarks during an interview on Arise TV, where he analyzed the recently approved windfall tax and the country’s second-quarter GDP figures for 2024.
Rewane pointed out that Nigeria’s GDP growth rate of 3.19% in the second quarter, though slightly improved from the first quarter’s 2.98%, is insufficient to achieve the ambitious economic goals set by the government.
He noted that approximately 75% of the economy’s sectors contracted during this period, undermining overall growth.
Reflecting on Nigeria’s aspirations, Rewane recalled that the country once aimed to be among the top 20 global economies but has since slipped to 32nd place.
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He emphasized the implausibility of reaching a $1 trillion economy from the current $384 billion GDP without an extraordinary 200% growth in the next few years, which he deemed unrealistic.
Rewane also criticized the federal government’s focus on revenue generation through the newly introduced windfall tax, arguing that it contradicts the administration’s professed commitment to an investment-led growth strategy.
He observed that despite an increase in Nigeria’s tax-to-GDP ratio from 4% to 9%, the populace has seen little benefit, which has led to widespread reluctance to pay taxes.
Discussing the impact of the windfall tax, Rewane highlighted that while Nigerian companies reported N1.4 trillion in foreign exchange revaluation gains, they simultaneously faced N1.7 trillion in forex losses, resulting in a net economic loss of N300 billion.
This skepticism comes in the wake of President Tinubu’s bold claims at the 2023 Nigeria Economic Summit, where he asserted that a $1 trillion economy could be achieved within three years, with a long-term target of $3 trillion by 2030.
Despite the administration’s optimism, persistent issues such as inflation and a volatile exchange rate continue to pose significant challenges to Nigeria’s economic growth trajectory.