By LOVETH AZODO, Lagos.
As the Federal Government works toward achieving its $1 trillion economy projection by 2030, a prominent economics and financial analyst has urged the administration to create mechanisms that align current economic realities with the expected growth.
Speaking at the 9th edition of the Nigerian Association of Insurance and Pension Editors’ (NAIPE) Conference, held Tuesday in Lagos, Dr. Afolabi Olowookere, Managing Director and Chief Economist at Analysts Data Services & Resources Limited, stressed the need for the government to adjust its policies and accelerate infrastructure development to attract more investments.
During his presentation, titled “Towards a $1 Trillion Economy: Roles of Insurance and Pension Sectors,” Dr. Olowookere highlighted Nigeria’s recent economic performance.
He noted that the country’s Gross Domestic Product (GDP) grew from 2.98% in the first quarter of 2024 to 3.19% in the second quarter.
However, he warned that the short- to medium-term outlook remained weak, citing inflation and interest rates as potential obstacles to achieving the $1 trillion target.
Olowookere provided a detailed breakdown of Nigeria’s inflation trends, stating, “The inflation rate rose from 21.82% in January 2023 to 34.19% in June 2024, slightly declining to 33.40% in July and further to 32.15% in August.
The rise has been largely driven by food prices and loose financial conditions.
The IMF forecasts inflation will gradually decline to 24% by the end of 2024 and reach 14% by 2027.”
He also touched on the ongoing depreciation of the naira, which has lost 71.15% of its value between January 2023 and August 2024, moving from N461/USD to around N1,650/USD. Olowookere cautioned that the naira would likely face further depreciation due to trade imbalances and inflationary pressures.
Given these economic challenges, he projected that Nigeria’s economy would reach only about $450 billion by 2030 under the current conditions. He emphasized the need to focus on key sectors, such as agriculture, ICT, trade, and manufacturing, which are the primary contributors to the nation’s output.
Addressing the role of the financial and insurance sectors, Olowookere noted that these sectors account for 6.579% of Nigeria’s GDP and continue to drive economic growth, despite the mixed overall performance of the economy.
He pointed out that the insurance sector’s total assets grew by 36.9% in Q1 2024, rising from N2.4 trillion in Q1 2023 to N3.3 trillion.
Despite these gains, insurance uptake remains low, with only 3.1% of adults holding a regulated insurance policy, according to the 2023 EFInA report.
Olowookere also highlighted the transformative role of digital technologies in the insurance industry, explaining how innovations such as insurtech, data analytics, and digital platforms are reshaping how insurance products are marketed and serviced.
“From online policy purchases to mobile claims processing, insurers are using technology to enhance the customer experience and streamline operations,” he said.
Earlier in the conference, the event’s Chairman, former Commissioner for Insurance, Mr. Fola Daniel, commended NAIPE for organizing the program. “As we gather here today, we stand at a pivotal moment in our industry, one that calls for reflection, innovation, and collaboration,” he said.
The conference attracted key stakeholders from the pension and insurance sectors, as well as retirees and university students.
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