Debt sustainability in Africa has emerged as a key concern among policymakers and development finance institutions (DFIs). Currently, 19 out of 54 countries in Africa exceed the 60% debt-to-gross domestic product (GDP) threshold prescribed by the African Monetary Co-operation Programme (AMCP) and 24 countries have surpassed the 55% debt-to-GDP ratio suggested by the International Monetary Fund (IMF). Of concern is the changing structure of Africa’s debt: countries are tilting towards non-concessional and domestic debt with higher interest rates. Governments’ ease of access to and control over the domestic debt market is leading to excessive public debt accumulation and macroeconomic instability. Aside from the high interest rate and debt-servicing burden, excessive domestic debt also stifles credit to the private sector, the main engine of growth and job creation.
International rating body, Fitch, has projected higher economic growth for Nigeria in 2018. The body estimated that Nigerias economy will grow by 2.6 percent, slightly higher compared to projections from the International Monetary Fund (2.1 percent) and The World Bank (1 percent). A myriad of factors may have driven the projected increase: improved availability of forex for the non-oil sector, higher government capital expenditure capability driven by more oil revenue, and fiscal stimulus. However, the relatively strong economic growth projected by Fitch and IMF may be hampered
The All-Share index (ASI) and Market Capitalization both depreciated (week-on-week) by 1.45 percent for the second consecutive trading week- June 3, 2016 to June 10, 20166. ASI depreciated by 401.8 points from 27,634.42 points to 27,232.62 points, while Market Capitalization declined by N140billion from N9.49 trillion closing the week at N9.35 trillion. All other indices declined, with the exception of NSE ASem Index, NSE Insurance Index, and NSE oil/Gas Index. The delay in the implementation of proposed forex policy continues to adversely affect stock market performance. However, with growing speculations that the new FOREX guidelines would be released in the succeeding week, market indices could perform better subsequently. Hence, monetary authorities should ensure the timely release and implementation of the new FOREX policy to boost investors confidence in the near term and ensure price stability in the capital market.
Infrastructural development is a key step in providing a competitive business environment for African economies. It provides the backbone for poverty reduction strategies and programmes designed to improve the livelihood of the poor. Africa is in dire need of infrastructural development. The absence of quality infrastructure in the continent holds back per capita economic growth by 2 percentage points each year and depresses firm productivity by as much as 40 percent (Escribano et al., 2008 and Kelly, 2012). Estimates suggest that around USD 90 billion is required to close Africas infrastructure gap annually until 2020 (AICD, 2010).
Real GDP Growth Rate- Nigeria and selected African Economies: While GDP growth in selected African economies have generally declined at different magnitudes with the slump in commodity prices, other e