The Central Bank of Nigeria (CBN) Governor, Dr. Olayemi Cardoso, has revealed plans to elevate Nigeria’s Gross Domestic Product (GDP) to $1 trillion within the next eight years. GDP, which measures the total value of goods and services produced within a country, was previously recalculated in Nigeria, rising from about $270 billion to $510 billion in 2013, largely due to the inclusion of new sectors such as telecommunications, entertainment, and retail. As a result, Nigeria was ranked as Africa’s largest economy and the 26th largest globally.

Despite this achievement, analysts argue that Nigeria’s economic growth has not translated into tangible benefits for the population, which continues to face economic challenges. Many believe that any efforts to increase GDP without significant shifts in economic management will fall short. For example, Anambra State Governor and former CBN Governor, Chukwuma Soludo, recently described the economy inherited by President Bola Tinubu as akin to a “dead horse,” highlighting how the previous administration left the country with serious economic challenges, including the printing of N22 trillion with no financial backing.

Soludo warned that the coming months would be tough for Tinubu’s economic team, of which Cardoso is a key member. He praised the new administration for its decisive reforms, such as the removal of the petrol subsidy and changes to the exchange rate system, which he referred to as necessary “bitter pills” to revitalize Nigeria’s economy.

However, some analysts are concerned that Nigeria is becoming a “sachet economy,” where most consumer goods are sold in small, one-time-use packages. This reflects the declining purchasing power of many Nigerians, as disposable incomes shrink, forcing families to buy only what they can afford in small quantities.

The government has outlined several sectors that could drive economic growth, including agriculture, oil and gas, manufacturing, solid minerals, fintech, information technology, real estate, and infrastructure. Additionally, the creative industry is seen as a key area for growth.

Cardoso, in his speech on monetary policy, emphasized that the CBN’s role will be to focus on inflation control and reduce direct interventions in the economy. He also mentioned plans to raise the capital base for Nigerian banks, which could fall between N250 billion and N500 billion, to support the $1 trillion economy goal. Regulatory changes are also anticipated for payment services, particularly for fintech firms, and the CBN is expected to maintain tight monetary policies through 2024 to control liquidity and inflation.

Cardoso expressed optimism that Nigeria could achieve similar economic stability to countries like Brazil, Mexico, and Indonesia, which have shown resilience to economic shocks. He also highlighted that Nigeria’s current unemployment rate, projected to reach 40.6% in 2023, is far higher than those of the aforementioned countries, and stressed that reducing this unemployment level should be a priority.

Nigeria continues to seek new investments, debt restructuring, and credit line restoration in an effort to stabilize the economy. Despite challenges such as a volatile naira and ongoing inflation, there are expectations that the country’s economy will grow stronger in the fourth quarter of 2023, with the International Monetary Fund (IMF) and World Bank projecting an annual growth rate of 2.9%.

On fiscal policy, Nigeria’s Finance Minister, Wale Edun, stated that the Ministry of Finance is working closely with the CBN to reform the foreign exchange market. The goal is to stabilize the exchange rate, reduce inflation, and lower interest rates, making borrowing more affordable for businesses and investors. He emphasized that the reform will ensure a rules-based foreign exchange market, protect smaller traders, and impose penalties on illegal speculators. The overall collaboration between the Ministry of Finance and the CBN aims to stabilize Nigeria’s economy and create a more conducive environment for growth.