According to the World Bank, poverty level in Nigeria increased in 2017 with almost half the Nigerian population living in extreme poverty. As stated in the “Nigeria Biannual Economic Update” report, approximately 49.2 percent of Nigeria’s population live below the PPP $1.90 per capita per day poverty line in 20171 – an uptick of 0.8 percentage points. Particularly important is that despite emergence from recession in 2017, poverty and unemployment levels increased. The World Bank suggests that prospects for poverty reduction have been jeopardized by limited connective infrastructure, and policy makers’ inability to identify interventions best suited for development potentials.
Macroeconomic Report & Economic Updates
The external reserves decreased week-on-week marginally by 0.2 percent from June 9, 2017 to June 16, 2017. The reserve declined from $30.27 billion to $30.21 billion. Given that crude oil revenue constitutes the most part of the reserve, the decline may be reflective of the week-on-week drop in global crude oil price (Crude oil price fell by approximately 2 percent to $47.377 per barrel as at June 16 2017). The ongoing forex intervention by the monetary authority also poses a challenge to foreign reserve conservation. Given the unimpressive performance of global oil prices in recent time, there is need to explore other areas with great potentials to generate foreign exchange earnings. Diversification of forex earnings remains the key to insulating foreign reserve against fluctuations in global commodity prices. The country can tap into solid minerals sector as alternative source of foreign exchange. Huge investment together with investor-friendly policies in solid minerals would make the sector attractive to investors.
Public Debt-to-GDP Ratio: The ratio of Nigerias cumulative government debt to national GDP has maintained an upward trend indicating the countrys declining economic productivity and ability to repay
Global economic growth remained fairly stable in 2016Q3 with baseline projections for global growth at 3.1 percent and 2.4 percent by International Monetary Fund (IMF) and the World Bank respectively. Growth in developed countries was moderate but unevenly distributed: while the U.S and the UK showed improvements, growth in other economies remained tepid. Among emerging countries, India witnessed higher growth while growth in China remained constant but the Chinese Yuan continued to appreciate. Given that India is Nigerias major crude oil importer, improving economic conditions in India may translate into rising demand for Nigerias crude oil. However, the continuous appreciation of the Yuan poses significant inflationary threat in Nigeria given the high level of imports from China. Subdued global demand, weak trade, uncertainties in commodity prices and consequences of the Brexit were the key constraining factors to growth over the period. In addition, growth in Sub-Saharan African countries remained generally slow on the account of low commodity price, political turmoil, and inconsistent government policies.
Gross Domestic Product Growth Rate: The growth performance of the Oil and Gas sector has been unsteady throughout years and declined most significantly in 2015Q4, following a positive growth recorded