Country Report Nigeria September 2009

Summary

The global economic recession and the consequent slump in oil prices have hit Nigeria hard, representing a major challenge for the president, Umaru Yar'Adua, and his government.
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-subsidy interest groups.
Official data show that non-oil growth remained robust in the first quarter of 2009. We have therefore raised our forecast for the year as a whole to 4.1% (from 3% previously), although this is still low by recent standards.
Real GDP growth is now expected to improve to 5.2% in 2010 (previously 4.4%), in line with the beginning of a global recovery and slightly higher oil production.
Food and fuel prices are expected to ease in 2009-10, but a weaker currency and looser monetary policy will mean that inflation falls only slowly, to an average of 11.5% in 2009 and 8.5% in 2010.
Slightly higher projected oil prices mean that the current-account deficit is forecast at 5.9% of GDP in 2009 (6.3% previously), before falling to 3.1% of GDP in 2010 (3.9% previously), as oil prices increase further.

The government has claimed that its amnesty programme, which ends on October 4th, is steadily achieving its objective of disarming the violence-ridden Niger Delta region.
The Independent National Electoral Commission (INEC) has warned that the delay in enacting proposed electoral and constitutional reforms is jeopardising the prospects of Nigeria achieving smooth general elections in 2011.
In mid-August the Central Bank of Nigeria (CBN) injected about N420bn (US$2.8bn) into five undercapitalised banks, after an audit found they had excessive non-performing loans.
The CBN created a further stir when it published the names of about 220 companies and individuals, including some of Nigeria's most powerful tycoons, saying they were the largest defaulting debtors of the five banks.
Nigeria's real GDP growth in the second quarter of 2009 was 6.73%, compared with 5.65% in the second quarter of 2008. Growth was largely driven by improvements in agriculture, wholesale and retail trade.
Manufacturing production declined by 1.4% in the second quarter of 2009, owing mainly to poor electricity supply.

Source: Country Report

This report covers the following industry codes:
SIC Code: 39
NAICS Code: 31