While the current federal administration is implementing significant economic changes, it is estimated that Nigeria's public debt would reach N70 trillion and that inflationary pressures will continue through the second half of 2023 (H2'23).

However, it is anticipated that the GDP will slightly increase at 2.94 percent.

Giving information during a webinar yesterday, analysts at Meristem Securities Limited, a Lagos-based investment firm, blamed the securitization of the N22 trillion ways and means balances among other factors for the increase in the public debt portfolio in H2'23.

Increased non-oil sector activity and higher oil output as a result of the new administration's policies were key factors in the expected 2.94 percent GDP growth.

The ongoing increase in the MPR, or monetary policy rate, formed the foundation for the persistent inflationary pressure.

Presenting the Macro economic outlook for H2’23 at the webinar themed: “Tough start, bumpy road, propitious end”, aimed to provide guidance on strategies for investment positioning for H2’23, Investment Research Analyst at Meristem, Mr. Sodiq Safiriyu, said: “When we are looking at the fiscal policy, we talked about the revenue base as well as the debt structure or the debt stock of the country. We see that these are still increasing for a while now even in H1’23 we see our debt stock rise to an unprecedented level and we still expect this to go higher amidst the securitized ways and means that will accumulate the debt stock and will make it rise over N70 trillion.

“Again, our expectation is that while the government continues to implement important reforms to increase its revenue base, to try to finance its promises, through borrowings so we expect the debt stock to continue to trend upwards.”

On GDP growth he said: “What we expect in H2’23 is that the GDP growth will be higher and this hinges on the improvement in business activities in the non oil sector. As well we expect that policies from the administration of President Bola Ahmed Tinubu will help to increase oil production volume during the period.

“Cumulatively, we have revised our 2023 GDP forecast upward to 2.94 percent (from an initial estimate of 2.7 percent). As I said earlier, this is lower than what was recorded in 2022.”

Safariyu added that the Monetary Policy Committee, MPC, will increase rates by 100 basis points as a result of the expectation that inflation will continue to be high due to rising food costs.

“For us, we expect that the MPC will still hike rates but at this point it will be less aggressive from what we experienced in the half part of the year. “For the end of 2023 our forecast for the naira for the year to end date is between N779 to N786 per dollar.”