Macroeconomic Report & Economic Updates
July 24, 2017
Nigeria Economic Update (Issue 27)
Recent data from the National Bureau of Statistics (NBS) shows that the value of capital imported to Nigeria declined by 54.34 percent; from $1.56 billion 2015Q4to $710.97 million in 2016Q11. This is the lowest value since the data was first released in 2007. Huge declines in Portfolio Investment (71.54 percent) and other Investment (44.84 percent) were the major drivers of the trend within the period. A myriad of factors have contributed to the decline in investments. The plunge in crude oil prices, and the resultant negative signals on investors confidence, was a key factor. This was exacerbated by the FOREX restrictions and delays in the assentation of 2016 Appropriation Bill. While the slight increases in oil prices and the recent signing of the budget into law could improve the general economic prospects, monetary authorities need to proffer solutions to the negative effects of the current FOREX restrictions on investments.
Capital Importation: Foreign investment into the agricultural sector was relatively flat between 2007 and 2012 but gained unusual momentum in September 2015. The spike in 2015 is likely driven by the
OPEC Monthly oil report reveals that Nigeria recorded the highest month-on-month increase in crude oil production among the OPEC member countries in August 2017. Specifically, at an increasing rate of 8 percent, domestic oil production rose to pre-2016 level of 1.86 million barrels per day in August 2017. With ongoing repairs in the sector, oil production could get to 2.2 million barrels per day in the near term, albeit the prior voluntary agreement to cap production at 1.8 million barrels per day. Going forward, there is need to address poor planning and policy inconsistencies in the sector, in order to ensure the influx of investors who have channeled their investments to other African countries due to laxity in policies in the sector.