Macroeconomic Report & Economic Updates

August 19, 2016

Nigeria Economic Update (Issue 35)

Recent report in the media highlights that Nigerias
GDP has dropped to $296 billion in 2016, in contrast to the $481 billion
recorded in 20151 and Nigeria has lost its position as Africas
largest economy to South Africa. This conclusion was based on the computation
of GDP with current naira-dollar exchange rate. However, while the naira has
significantly lost its official value since the adoption of a flexible exchange
rate, estimating GDP merely with a single exchange rate figure (rather than its
yearly average) cannot be regarded as an appropriate method to conclude on Africas
largest economy.

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Africa Economic Update (Issue 2)

Business activities in Africa slightly improved in February 2017 albeit at a slow rate. Sales Managers Index (SMI) for Africa an assessment of business condition in Pan-African Economy increased by 0.4 index points from 52.2 points in January 2017 to 52.6 points in February 2017. Sub-Saharan African countries experienced better business activities than North Africa in the review period. The two largest economies in the region, Nigeria (48.5 index points) and South Africa (49.2 Index points) registered contraction in the review period as Nigeria remained in recession while high unemployment remained a problem in South Africa. The growth in SMI recorded in the review period is driven by improvement in business confidence and sales price which outweighed the fall in other components market growth, sales output and staffing level. 

Nigeria Economic Update (Issue 39)

The monthly monetary survey by the CBN shows a decline in money supply for the month of August 2017, relative to July 2017. Narrow and broad money supply dropped by 4.2% and 1.5% to N9,891 billion and N21,851 billion respectively. The continuous monetary contraction witnessed over the past months may be associated with aggressive sale of treasury bills by the CBN through open market operations. This act is capable of mopping up liquidity in the economy, reduce loanable funds in the banking system, and constrain the easing of lending rates in the near term.

Nigeria Economic Update (Issue 46)

The Executive council recently approved a three-year external borrowing plan (2016-2018) which specifies external borrowing of approximately $30 billion (to be sourced mostly from MDBs) for infrastructure development. Although, the plan is yet to be approved by the Senate, the planned concessional loans for infrastructural development would imply inflows of foreign exchange which could help moderate the exchange rate volatilities in the near term, and offer potential improvement in business productivity and job creation.