New Telegraph

Analysts: Weak household income hurts economic growth

Stunted household income in Nigeria, as reflected in the National Bureau of Statistics’(NBS) latest Gross Domestic Product (GDP) report (based on the expenditure approach), not only continues to impede private investment in the country, but also negatively impacts government tax revenue, analysts at United Capital Research have said.

The analysts stated this in a report, titled, “A case for the FGN’s reform to focus on household income growth,” obtained by New Telegraph yesterday. The report reads in part: “Lasering in on household consumption, we highlight that although Real GDP growth seemed to be rebounding from prior recessions in 2016 and most recently in 2020, household consumption remains well below pre-2015 levels in real terms.

“Certainly, this reflects the severity of the household income squeeze and highlights a protracted poor wage growth in a period that has been plagued with two recessions, galloping inflation and FX constraints. “Our view is that though some steps have been taken towards reform, the focus on household income growth has been grossly inadequate. Again, stunted household income growth continues to hurt Nigeria’s demographic allure to private investment and limits government tax revenue. Perhaps, this explains Nigeria’s poor FDI showing over the same period.”

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