Macroeconomic Report & Economic Updates

July 8, 2016

Nigeria Economic Update (Issue 29)

OPEC weekly basket
price decreased marginally from $45.95 on June 24, 2016 to $45.26 on July 1,
2016,while Nigerias bonny light fell by $1, from $48.90 to $47.91.
The apparent decline in crude oil price was driven by lingering market demand
uncertainty, following the unexpected Brexit referendum. More so, ease
in supply disruptions in Nigeria and Canada may have contributed to the
downward pressure on prices. Going forward, until there is greater regulatory
precision on global oil output levels, prices may likely remain stuck or continue
to exhibit a downward trend. Although, Nigerias fiscal constraints slightly
relaxed with oil production increasing in the review week (following repairs on
sabotaged pipeline channels), potential global crude oil oversupply threatens
governments revenues. However, oversupply threats could be reduced if there is
a consensus on oil production quotas in the upcoming OPEC meeting.

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Nigeria Economic Update (Issue 43)

The IMF World Economic Outlook report, indicates a downward revision for Nigerias 2017 economic growth. Specifically, growth has been projected to expand by 0.6 percent relative to the 1.1 percent earlier projected. The decrease is attributable to sharp growth slowdown experienced in Nigeria, occasioned by prevailing constraining factors (crude oil production disruptions, Forex and power shortages, and weak investor confidence). The outlook, which does not seem optimistic, reveals Nigerias further vulnerability to potential external and internal risks/shocks.

Nigeria Economic Update (Issue 41)

The naira continued its downward trajectory in the review week. Specifically, naira depreciated significantly at the parallel segment by 3.5 percent to a record low of N440/$ on September 23, 2016. Notably, this was driven by the worsening liquidity constraints at the interbank market which left the excess forex demand to be sourced at the parallel market, and thus exerted downward pressure on the naira. The naira is likely to further weaken given that most of the liquidity constraints are exogenously determined and thus forex supply will likely remain subdued by its demand.