Financial expert Rewane doubts Tinubu’s five-year $1trn economy target

• Published On: 30 August 2024 at 18:09

Bismarck Rewane, a renowned economist and Managing Director of Financial Derivatives Company, is skeptical of the current administration's goal of achieving a $1 trillion economy within the next five to six years.


Rewane spoke on Arise TV's morning show about the recently approved windfall tax and the GDP figures for the second quarter of 2024.



Rewane argued that the current GDP growth rate of 3.19% is insufficient to drive significant economic progress, noting that approximately 75% of the country's economic sectors contracted during the quarter.



He also stated that the country has fallen behind on its goal of becoming one of the top 20 global economies, making the $1 trillion target increasingly unattainable.



Second, we now say that we want the economy to be $1 trillion, but we are currently $384 billion, which means we need to grow by 200% in the next 4 to 5 years, which will not happen."



"We also said we want to insulate our economy from external shocks but as we integrate our economy into the global economy, we are facing those shocks."



Rewane argued that this focus contradicts the current administration's investment-led growth strategy, which aims to grow Nigeria's economy to $1 trillion over the next three years.



He noted that many Nigerians lack motivation to pay taxes because they do not see any tangible benefits from the taxes they have already paid.



He pointed out that, while Nigeria's tax-to-GDP ratio has risen from 4% to 9%, the population's well-being has not improved in proportion.



He also highlighted the challenges that Nigerian companies face, noting that while they reported N1.4 trillion in foreign exchange revaluation gains, they also suffered N1.7 trillion in forex losses during the same period, resulting in a net economic loss of N300 billion.



Rewane's comments contrast with President Tinubu's optimistic projection at the 2023 Nigeria Economic Summit, when he stated that a $1 trillion economy could be achieved in three years, with a long-term goal of $3 trillion by 2030.