The year 2022 has been an eventful year. As we wrap up all the activities for the year and look forward to a new one, it is important that we begin to visualize what the new year heralds and be better prepared. The past year was marked by some notable incidents: President Muhammadu Buhari signed the 2022 Election Act, CBN aired a series of controversial announcements, the Nigerian government plans to abandon the subsidy regime starting next year, and 5G has arrived in Nigeria; however, deployments have been slow.
These and many more are the highlights that shaped 2022, but in this article, we will focus on the major events that have been projected to shape Nigeria in 2023.
The upcoming general election in February 2023 will be Nigeria’s seventh democratic election. It has been recognized as one of the most important electoral events in the country’s electoral history, as more candidates are vying for the presidential seat, and more Nigerians become politically aware and involved.
And in a historic move, Nigeria will broadcast its election results electronically for the first time in the upcoming elections, as contained in the 2022 Election Act, which promises a credible election. Political analysts have praised the signing of the Law, since it provides for a more transparent electoral system to allow the proper functioning of the country’s democratic processes. The outcome of the elections will determine, to a large extent, the extent of the country’s economic growth.
CBN National Card
The Central Bank of Nigeria (CBN) had announced plans to develop a national national card scheme which it expects to get off the ground in January 2023. Among its reasons for launching the card scheme, the CBN listed financial inclusion, data sovereignty of consumers and the empowerment of banks. to offer differentiated products and services.
The big question, however, is whether the CBN needs to launch a national card to achieve this. Currently, in Nigeria, there are local and international card schemes that are already meeting these needs. These card schemes, particularly Mastercard, Visa and Verve cards, are enabling banks to offer sufficiently differentiated products and services, among other card payment benefits.
The Verve card in particular is a national card scheme homegrown from Nigeria and one of the most successful indigenous payment cards in Africa. It has increased its value proposition and market base to be accepted in more than 180 countries and issued in countries in Africa, providing secure and ubiquitous payment options.
These card schemes not only meet the objectives of the proposed national card scheme, but telecom operators, payment service banks (PSBs), fintechs, commercial banks and microfinance banks are playing in this space to create a more inclusive environment from a financial point of view, secure for data, and a differentiated payment ecosystem by products.
Another question that the CBN will be forced to answer in the new year as it launches its national card is the ethical question of fairness. Will the CBN play fair now that the regulator has also become a player? There has been widespread concern about the ethical disposition of this movement. Experts believe that CBN will want to force banks and even Nigerians (card holders) to sign up for the government owned card.
CBN’s entry into the card business; experts project that it will effectively crowd out the competition and compete directly with local cards as well as other international card companies. They further suggest that instead of playing the field, the main bank should remain in its role of regulator while providing institutional support to existing players, ensuring that they meet established standards for the benefit of the national economy. 2023 will decide.
slow economic growth
The World Bank adjusted its projection of Nigeria’s economic growth for 2023 from 3.3% to 3.2%. The world financial institution indicated that the slow growth would be supported by an increase in private consumption, which will be driven by the decrease in inflationary pressures.
In 2022, Nigeria recorded its highest inflation figure since 2005 at 21.15%. This inflation was mainly instigated by; interruptions in the food distribution network as a result of insecurity, high import costs, currency depreciation and an increase in the cost of production.
As the new year rolls around, there will be high expectations for the government, through the CBN, to be more intentional with its fiscal and monetary policies and come up with business-friendly initiatives that help address challenges affecting macroeconomic growth.
It’s the age of 5the State of the art mobile network, which is established to drive faster and better communication. As of June 2022, around 70 countries have implemented 5G technology, with more users projected to follow. Earlier this year, Nigerians joined the 5G user list after the National Communications Commission (NCC) announced an auction process for 3.5GHz 5G spectrum.
With this, the NCC will enable licensed operators with existing infrastructure to deliver 5G services to Nigerians while providing a regulatory framework that will guide these 5G network providers on how to protect users.
Although the rollout is not yet that extensive, experts believe that the technology has many benefits for Nigerians, both individuals and businesses. The adoption of this technology is expected to increase opportunities and generate new business with the evolution of blockchain in 2023, which will determine how much work needs to be done to ensure that advanced technologies are accessible to more Nigerians.
2023, like any election year, holds many uncertainties, but the hope is that the theme of collaboration will endure. Collaboration between government and private sector actors, and collaboration between government and citizens to create a robust and efficient economy.
Growth in the Oil Sector
As Europe moves completely away from Russian energy and the promises offered by the recently passed Petroleum Industry Act (PIA), Nigeria is emerging as a more attractive destination for foreign direct investment in oil and gas.
The government has recently redesigned its security strategy along the Niger Delta corridor to curb facility vandalism and oil theft. The new strategy of involving the militants in addition to military operations in the Niger Delta is expected to increase daily oil production from 1.22 mb/d to the 1.7 mb/d stipulated by OPEC.
The government has also speculated that it will remove oil subsidies from its spending in the new year.
Other indicators of growth in the oil sector include the recent commercialization of the government-owned Nigerian National Petroleum Company (NNPC) Limited, which will further liberalize the sector. The completed Dangote refinery, with its 650,000 b/d, is expected to meet Nigeria’s fuel requirements, provided domestic oil prices are profitable and fuel imports are reduced.
With all these efficient components brought together; With the expected foreign investment, the increase in security, the increase in daily oil production, the elimination of the oil subsidy and the takeoff of the Dangote refinery, the oil sector is going to be a major contributor to the balance of payments of the economy.
In fact, the new year seems viable; the assumption is that key players, government, business and individuals will assiduously step into their roles and deliberately work to make the new year productive and prosperous for all.