Country Report Nigeria January 2009

Outlook for 2009-10

• 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 and the non-oil sector suffering from the global financial crisis, real GDP growth is expected to fall back from the levels witnessed in recent years, to 4.6% in 2009 and 5.2% 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 will mean that inflation falls only slowly, to 10.9% in 2009 and 8.5% in 2010.
• In line with the global slowdown, the Economist Intelligence Unit's forecasts for oil prices have again been cut, to US$35/barrel in 2009 (previously US$65/b) and US$50/b in 2010 (previously US$68/b).
• The reduction in the oil price forecast means that Nigeria's overall current account is forecast to record a deficit of 13.2% of GDP in 2009 (previously 6.2% of GDP) and 7% of GDP in 2010 (previously 5.6% of GDP).

Monthly review

• The Supreme Court has upheld the 2007 election of Mr Yar'Adua, rejecting claims that the contest was marred by widespread rigging. The verdict ended much of the uncertainty over the legitimacy of Mr Yar'Adua's rule.
• In December 20 new ministers were appointed to the cabinet in what had become a drawn-out reshuffle. Most notably, Mansur Muhtar replaced Shamsuddeen Usman as finance minister.
• Hundreds of people died in November in a weekend of ethno-religious clashes in the central Nigerian city of Jos, the capital of Plateau State.
• Mr Yar'Adua has presented his 2009 budget proposals to the National Assembly. The president predicted that revenue would be well down on 2008 given declining world oil prices, but that expenditure would increase slightly.
• After two years of sustained stability, the value of the Nigerian naira depreciated by almost 20% between late November and late December as investors and banks worried about the impact of falling oil prices.

Source: Country Report

This report covers the following industry codes:
SIC Code: 49;2834;80;60
NAICS Code: 22;3254;62;52

This report covers the following industry codes:
SIC Code: 49;2834;80;60
NAICS Code: 22;3254;62;52