Country Report Nigeria November 2008

Outlook for 2009-10

• Major challenges for the president, Umaru Yar'Adua, will be to bring stability to the turbulent Niger Delta region and 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 well below potential and the non-oil sector suffering some of the fallout from the global financial crisis, we have lowered our forecast for real GDP growth to 4.6% in 2009 and 5.4% in 2010.
• Food and fuel prices are expected to ease in 2009-10, but excess liquidity will continue to make it hard for the Central Bank of Nigeria to control inflation, which is forecast to average 10.3% in 2009 and 9.2% in 2010.
• In line with the global slowdown, our forecasts for oil prices have been cut substantially, to US$75/barrel in 2009 (previously US$91/b), before recovering slightly to US$82/b in 2010 (previously US$100/b).
• Nigeria's overall current account is forecast to return to a deficit of 4.4% of GDP in 2009 (previously a surplus of 0.8% of GDP) and 2.5% of GDP in 2010 (previously a surplus of 2.1% of GDP).

Monthly review

• In his nationwide Independence Day broadcast on October 1st MrYar'Adua urged citizens to renew their faith in Nigeria and the vision of transforming the nation into a strong and stable democracy.
• The president of the Senate, David Mark, has expressed confidence that the National Assembly will succeed in amending the flawed 1999 constitution.
• Government and military officials have claimed that the crackdown against the militancy in the Niger Delta is succeeding.
• The fall in world oil prices has forced the administration to cut its spending plans for 2009.
• The government has published the 2008-12 Nigeria Customs Tariff Book, which shows that the administration does not intend to liberalise trade, as promised but never delivered by its predecessor.
• The Central Bank governor, Chukwuma Soludo, told a conference in the capital, Abuja, that economic fundamentals in Nigeria, including liquidity in the financial system, are sufficiently strong to weather the global credit crisis.

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;13
NAICS Code: 52;211