Macroeconomic Report & Economic Updates
August 19, 2017
Africa Economic Update (Issue 5)
Available data from Nigeria Bureau of Statistics shows a decline in the Nigeria Aviation sub-sector (Transport Sector) real growth rate in 2017Q1. Compared to the preceding quarter, the sub-sector declined significantly by 9.6 percent, due to decline in the number of passengers and movement of aircrafts this may be connected to the closure of the Abuja airport for infrastructural development during the period. To ensure a near-optimal performance of the aviation sector, the government should also make efforts to improve aviation safety and security, establish a national carrier, and improve aircraft maintenance to world class standards.
The naira depreciated by 8.2 percent from N305/$ on February 5th, to N330/ $ on February 12th 20166. The apex body identified the increased domestic demand for forex to pay for foreign medical treatments and schools fees (15 percent of total demand) 7 as the main drivers. As a result, the apex bank is considering to discontinue the provision of forex for payment of medical bills and school fees abroad and to re-channel the forex towards the manufacturing sector of the economy. With the continuous depreciation of the naira, and the CBNs resistance from calls to devalue the currency, the options for alternatives measures seem to be diminishing.
International Monetary Fund (IMF) revised down growth forecast for Sub-Saharan Africa by 0.2 percentage points, while retaining growth estimates for Nigeria and South Africa in 2017. Precisely, growth rate forecast for Africa was reduced from 2.8 percent in January 2017 forecast to 2.6 percent in April 2017 forecast while growth estimates were retained at 0.8 percent for both South Africa and Nigeria. In contrast, global economic growth outlook was increased by 0.4 percentage points from 3.1 percent to 3.5 percent within the same period. Growth in Sub-Saharan Africa is hampered by adverse cyclical and supply side factors, weak fiscal buffers and rising public debt amongst non-commodity exporters as well as severe drought was experienced in Eastern and Southern Africa