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Top 7 Major Predictions for Nigeria in 2023 Everyone should know and expect to happen
State of the Nigerian Nation 2022 and Expectations for 2023
After just celebrating its independence 15 days ago, Nigerians from across the country are lamenting the hardships and hunger in the land as the cost of living continues to soar higher on a daily basis, insecurity crisis, tribalism, looting, prolonged Academic Staff Union of Universities (ASUU) prolonged industrial action that just came to an end after 8 months, among others.
While an average Nigerian wouldn’t wait for the year 2022 to wrap up as fast as it can and look ahead for promising socio-economic stability in 2023, I guess, without urgent measures by the government at all levels to mitigate the sufferings of Nigerians, the situation would worsen and become intolerable.
Everyone in Nigeria should expect the government to wake up and make drastic reforms to turn the situation around for the better.
They have warned that failure to genuinely tackle the myriad of difficulties and deprivation the citizens are suffering could inflict dire consequences on the country come 2023.
According to the Guardian, Nigerians listed mass killing of innocent and defenseless Nigerians in their homes, places of worship, farms, offices, and on the roads by terrorists, herdsmen, and bandits; unabated kidnapping of citizens everywhere; extremely high cost of living; undermining of the education system; rising tax burden on citizens and businesses; perennially poor electricity supply amid frequent hike in tariff and decay infrastructure among the challenges making life unbearable for the people.
Amidst the failing conditions and reports, there are the top 7 key infrastructure, economic and political predictions for Nigeria in 2023 which represent major things everyone should expect to happen in Nigeria in 2023.
Top 7 Major Predictions in Nigeria for 2023 everybody should know
Peter Obi Predicted to Win 2023 Nigerian Presidential Election
The first in our top 7 predictions everyone should expect to happen is the outcome of the 2023 Nigerian presidential election. A nationwide opinion poll conducted in early September has predicted that the presidential candidate of the Labour Party, Mr. Peter Obi will emerge as the winner of the 2023 presidential election, according to Daily Post Nigerian News.
The opinion polls were commissioned by Anap Foundation and conducted by NOI Polls Limited in all six geo-political zones.
The President & Founder of the foundation, Mr. Atedo Peterside, said on Thursday, 15 September 2022 that the polls showed a substantially close race between Peter Obi of the Labour Party, the All Progressives Congress (APC) presidential candidate, Asiwaju Bola Tinubu and Atiku Abubakar of the Peoples’ Democratic Party (PDP).
In Nigeria’s ‘business-as-usual’ political scenario, one would expect the ruling party APC’s presidential candidate, Asiwaju Bola Tinubu to emerge victorious, the rising inflation and fiscal pressures the country is currently experiencing may likely lead to serious political challenges from the current administration setup, the Economist Intelligence Unit (EIU), the research and analysis division of the Economist Group, has predicted.
In a like manner, The United States-based National Democratic Institute and International Republican Institute (NDI/IRI) had earlier on July 2022 predicted a runoff in the 2023 Nigerian presidential election with the emergence of Labour Party presidential candidate, Peter Obi and his New Nigeria Peoples Party (NNPP) rival, Rabiu Kwankwaso, as major forces in the race.
A delegation team of the NDI/IRI, led by the Secretary of State for Ohio, Frank LaRose, said on July 22, while presenting its first joint pre-election assessment report to journalists in Abuja described Obi and Kwankwaso as viable “third forces”, saying their emergence had given renewed hope for Nigerians.
Nigerian predicted to enjoy increased electric power supply in 2023
One of our key predictions for Nigeria in 2023 is on the energy supply boost. According to Quantumrun, on the economic and infrastructural predictions for Nigeria for 2023, Nigeria and Siemens signed an electricity agreement to generate 11,000MW by 2023 which means that Nigerians are expected to enjoy more supply of electric power in 2023 if the prediction comes to pass and Nigeria adds 11,000 megawatts (MW) of electricity to the national grid next year.
The agreement to generate the additional power was the outcome of a meeting Nigerian President Mohammadu Buhari held with German Chancellor, Angela Merkel on August 31, 2018.
Quantumrun Foresight. the Consulting and Software Firm, also predicted that Nigeria will increase the daily production of crude oil to 3 million barrels in 2023.
Inflation rate remains high – Inflation rate predicted to remain high
In 2021, Nigeria recorded one of the highest inflation rates in the world at around 17 percent, Statista recorded. In current 2022, Nigeria’s inflation rate surged to a 17-year-high of 20.5% in August. Inflation rose to 20.5% in August from July’s 19.6%, marking the highest print since September 2005. The result was driven by a stronger increase in food and non-alcoholic beverages, housing, water, electricity and gas, and clothing and footwear prices. Consumer prices rose 1.77% month on month in August. In 2020, Nigeria recorded one of the highest inflation rates worldwide.
The European Intelligent Unit (EIU) wrote that inflation in Nigeria is above the target ceiling and will remain so throughout 2022-2026. Elevated global prices for diesel (not subsidised) and wheat due to the war in Ukraine, will keep inflation high (even by Nigerian standards), at 19.1% in 2022. The fiscal deficit will widen to a multi-decade high as high world fuel prices push up the bill for petrol subsidies and as crude oil output remains low, causing more political problems in Nigeria.
It is predicted that between 2023-2026, the inflation rate in Nigeria is expected to be lower as the initial price shock of the Russia-Ukraine war subsides and tighter monetary conditions take effect, but will remain high – well above target (at an average of 13.7%), owing to expected fuel price liberalization from mid-2023, electricity tariff adjustments and devaluations of the naira in 2025‑2026 as global oil prices dip by 2026.
As an emerging economy is likely to grow faster, leading to an increase in demand for goods and services, when the demand increases and the supply stays the same, prices in Nigeria are likely to increase, leading to inflation.
On the factors undermining economic growth in SSA, the World Bank said: “The war in Ukraine is exacerbating already high inflation and weighing on economic activity by depressing both business investments and household consumption. mainly as a result of a slowdown in global growth, including flagging demand from China for commodities produced in Africa
Another factor that plays a role is poor management of high inflation rate is the lack of a well-established monetary policy. This can turn into the manipulation of the currency in order to achieve short-term goals, for instance, to decrease the cost of exports. In addition, the excess of the money printing presses the currency downward and pushes inflation higher.
More Nigerians are predicted to become poorer in 2023
It is expected that more Nigerians will become poorer in 2023 due to hardship associated with declined economic growth and a high rate of inflation as one of the predictions for Nigeria come 2023.
On its growth forecast, The World Bank has lowered its economic growth forecast for Nigeria in 2023 to 3.2 percent from 3.3 percent, citing a slowdown in global growth, the war in Ukraine, and including declining demand from China for commodities produced in Africa.
Highlighting the predicted growth factors for Nigeria’s economy, the World Bank said: “The Nigerian economy is projected to slow in 2023, down to 3.2 percent (from 3.3 percent) and persist at this level the following year.
The World Bank said elevated food prices (inflation) are causing hardships with severe consequences in one of the world’s most food-insecure regions – the Sub-Saharan Africa – in which Nigeria falls, as a result, drifting more Nigerians into poverty margin.
The interconnected crises come at a time when the fiscal space required to mount effective government responses is all but gone. In many countries, public savings have been depleted by earlier programs to counter the economic fallout of the COVID-19 pandemic.
Nigeria is currently in debt distress and spent N1.94 trillion after generating N1.63 trillion in revenue in the first quarter of 2022 as the cost of repaying debt surpasses the revenue, according to Daily Post Nigeria News, even after The International Monetary Fund (IMF) had predicted that Nigeria’s debt-service-to-revenue ratio would jump to 92% in 2022 from 76% in 2021.
The high commercial borrowing costs has made it difficult for Nigeria to borrow on national and international markets as tightening global financial conditions are weakening currencies and increasing African countries’ external borrowing costs.
The President of the World Bank Group, David Malpass, has said that the bank will work with the International Monetary Fund to assess Nigeria’s debt sustainability. The statement was made by the World Bank Group Chief after Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had disclosed that the Nigerian government was in talks with the IMF and the World Bank to restructure the country’s debts. The Nigerian Finance Minister had said the situation for the 2023 projection is that Nigeria will use about 65 percent of her revenue to service debt since the cost of debt service is rising because of the rising interest rate globally, which is resulting also in higher debt service costs.
The interpretation of the prediction is that hunger driven by economic shocks (increased costs, inflation, and supply chain disruptions, among others), violence and conflict, and extreme weather, will sharply increase in Nigeria in 2023 and likely beyond, if the trend continues, as the country is at the brink of facing acute food insecurity in 2023.
Chronic insecurity in many parts of Nigeria, a high rate of inflation as well as unemployment are accentuating Nigerian problems, according to the EIU
EIU said the situation will further worsen the economy, with other contributory factors being power supply issues and monetary tightening policies.
The backdrop is making much-needed but unpopular economic and fiscal reforms to take more Nigerian out of poverty more difficult.
It predicted that growth will be stronger in 2023-25 owing to higher exports and lower imports in real terms, but added that it ultimately expects the economy to remain fragile and reliant on oil.
It is expected that Nigeria will end monetary tightening from 2023, unlike central banks globally. The central bank is more concerned about output gaps than inflation, and will therefore fail to act aggressively enough to bring inflation down to target.
Again, it was predicted that the mass poverty compounds ethnolinguistic and religious divides among Nigerians and the government lacks the resources (and often the will) to make federal Nigeria function as a whole.
What should be done?
While growth is expected to be supported mainly by the rebound in private consumption prompted mostly by accommodative monetary policy as inflationary pressures subside, the Nigerian government should urgently implement measures to restore macroeconomic stability and protect the poor in a context of slow growth and high inflation.
The need for Nigerian governments to improve the efficiency of existing resources and to optimize taxes in response to the above challenges has been stressed.
The Nigerian government has the opportunity to protect human capital and climate-proof food production, in the agriculture and food sector, by re-orienting their public spending away from poorly targeted subsidies toward nutrition-sensitive social protection programs, irrigation works, and research and development that will offer higher returns.
The Nigerian government must reprioritise its investment opportunities maintains the level of spending in a critical sector while raising productivity, building resilience to climate change, and achieving food security for all. Creating a better environment for agribusiness and facilitating intra-regional food trade could also increase long-term food security in a country that is highly dependent on food imports.
Insecurity predicted to spread throughout Nigeria
The EIU predicted a moderate likelihood that Boko Haram’s activity would spread from the northeast to central Nigeria. After emphasizing that the presidency of President Muhammadu Buhari was marked by a sharp deterioration in the security situation across the country, the problem has reached levels that will take generations to address.
In the northeast, there will be constant conflict between the military and two Islamist terrorist groups – Boko Haram and the Islamic State of West Africa Province (ISWAP). Inadequate military resources are projected to prevent the government from gaining full control of the region.
Again, according to the group, unrest in the southeast is driven by separatist groups in Biafra, and perceptions of the underrepresentation of Biafran in politics and governance have grown over time, and by oil-producing South-South militants to produce.
It is expected as predicted that insecurity will spread beyond the northeast to other regions in Nigeria in 2023.
Nigerian Civil War II Looms
A civil war has been predicted and the Nigerian Civil War II is expected to begin in Nigeria between 2023 and 2026, according to the European Intelligent Unit (EIU).
With the widespread increase in kidnappings and banditry by heavily armed and organized criminal networks spreading in central Nigeria and further south and merging with terrorist cells, the EIU said it would be able to protect the capital, and while that may be possible, ignoring other troubled states would cause serious problems and exacerbate an already deteriorating security situation in the country.
The basic premise of the EIU is that the Nigerian Federal Government can continue to claim control over “core areas” such as the capital Abuja and other places of economic and political importance.
While this is enough to keep the government in power, much of the country is not operate normally. It may lead to the next civil war. No one knows what direction or dimension it will take, but it’s probably ethical and religious.
The Nigerian Banking sector predicted to face another crisis in 2023
The last which is the 7th major prediction for Nigeria everyone should expect is that the Nigerian banking sector is to get set for another crisis, which was risk scenarios that might substantially change the business operating environment over the coming two years.
For Nigerian banks, operating environments could deteriorate between now and 2023, Credit rating agency, Fitch Ratings has said.
In a new report on 31 May 2022 which was seen by Business Insider Africa, Fitch said the banks could experience a deteriorating operating environment between now and 2023. And that’s because of adverse global macroeconomic conditions which are already affecting the Nigerian economy.
While the rating agency noted that it does not expect the Nigerian banking sector to experience material shock/losses, it, however, said that soaring inflation has led the Central Bank of Nigeria (CBN) to raise its benchmark rate by 150bp on 24 May, and the pressures on banks’ profitability and asset quality will be higher in 2023 than we had initially expected for 2022. In its meeting in May 2022, the CBN raised its benchmark interest rate by 150 basis points to 13 percent, the first time in six years. It raised it further in July by 100 basis points to 14 percent.
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