Country Report Nigeria October 2017

Country Report Nigeria October 2017

  • October 2017 •
  • Report ID: 325900 •
  • Format: PDF

Outlook for 2018-22



  • Uncertainty over the president's health, violent unrest in many parts of the country and severe economic difficulties will remain sources of serious in-stability throughout 2018-22, but probably peaking around the 2019 elections.
  • Nigeria's democracy is expected to prove sufficiently robust to survive the instability, but there are small risks of parts of the country becoming ungovernable or elements of the army attempting a coup.
  • Policy reform will be slow as efforts to introduce market-oriented reforms and diversify the economy away from oil come up against vested interests, ideological opposition and bureaucratic inefficiency.
  • Real GDP growth will be slow to recover from the recession of 2016, given an ongoing period of historically low oil prices and the weak policy response from the authorities, which will sap confidence in the economy more generally.
  • Although inflation will come down from the highs seen in early 2017, price pressures from election spending and a weak currency will persist.
  • The value of oil exports will increase during much of the forecast period, but this will be from a low base and will be offset by recovering import demand. The current account will post only small surpluses as a result.


Review



  • Since returning from medical leave in August, the president, Muhammadu Buhari, has missed a number of weekly cabinet meetings, further raising speculation over the apparently deteriorating state of his health.
  • A Nigerian minister has accused the government's opponents of sponsoring the Indigenous People of Biafra, a secessionist group in south-east Nigeria that the military has categorised as a terrorist organisation.
  • The national economy grew by 0.55% year on year in the second quarter of 2017, indicating its emergence from recession, according to the latest quarterly GDP report published by the National Bureau of Statistics on September 5th.
  • Total public debt climbed to N19.6trn (US$64.2bn) at the end of June 2017 from N16.3trn a year earlier, according to data published by the Debt Management Office on September 11th-a more than 20% increase.
  • Annual inflation in Nigeria fell for a sixth consecutive month in July to 16.1%, but food inflation rose to 20.3%, its highest level in eight years, according to the latest consumer price index published at the end of August.
  • Nigeria's merchandise trade balance has continued to improve in year-on-year terms, on the back of slightly improved fortunes in the oil sector. Non-oil exports remain insignificant in spite of diversification efforts.


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