Country Report Nigeria February 2009

Summary

The world recession and consequent slump in oil prices is expected to hit Nigeria hard, representing a major challenge for the president, Umaru Yar'Adua, and his government.
Further challenges for the president include attempting to bring stability to the turbulent Niger Delta region and attempting to find a solution to the ongoing energy crisis, under which nationwide power cuts are commonplace.
Economic policy reform will be slow, as the country stands at a crossroads between implementing tough, unpopular market reforms and pandering to nationalistic and pro-subsidies interest groups.
With the oil sector operating below potential, owing to militant action and OPEC quota cuts, and the non-oil sector suffering from the global financial crisis, real GDP growth is expected to fall to 3.5% in 2009 and 4.8% in 2010.
Food and fuel prices are expected to ease in 2009-10, but a weaker currency and looser monetary policy from the Central Bank of Nigeria (CBN) will mean that inflation falls only slowly, to 11% in 2009 and 8.5% in 2010.
A slight reduction in forecast oil production means that Nigeria's overall current account is forecast to record a deficit of 14.7% of GDP in 2009 (previously 13.2% of GDP) and 7.8% of GDP in 2010 (previously 7% of GDP).

Mr Yar'Adua has spoken of the challenge presented to maintaining macroeconomic stability during the global economic slowdown.
A former aviation minister, Femi Fani-Kayode, has been charged with 47 counts of money-laundering while he served in office between 2006 and May 2007.
Concern has grown that the light sentences often seen for officials found guilty of corruption are failing to act as a deterrent.
Mr Yar'Adua has inaugurated a special committee to help his administration to steer Nigeria through the economic difficulties brought on by the global economic turmoil.
The passage of the 2009 budget has been delayed, almost certainly because of the changes in economic circumstances since the draft budget was submitted.
The Central Bank has introduced a more restrictive foreign-exchange system in an attempt to reduce speculative attacks on the naira.
According to the CBN, preliminary estimates show that Nigeria's real GDP growth in 2008 was 6.8%, compared with 6.2% in 2007.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;47;1
NAICS Code: 52;48;11