The recent report by United Nations Development Programme (UNDP) shows that Nigeria’s Human Development Index (HDI) value rose very marginally from 0.530 in 2016 to 0.532 in 20171. However, overall, the ranking remained unchanged at 157th position out of 189 sample countries – putting the nation in the low human development category, and below Ghana, Kenya and a few other sub-Saharan countries. The HDI criteria which are broadly inclusive of countries’ social, political and economic diversity and indicative of the quality of life, may have shown limited progress in Nigeria due to rising population2 (currently, the population stands at 190.1 million). In the population growth and absence of the political will to address the sub-optimal HDI, signalled by the historic low budget share allocated to the education and health sectors, significant improvements in the HDI is not foreseeable in the near future.
Macroeconomic Report & Economic Updates
Recent data from the National Bureau of Statistics (NBS) show that total capital importation in 2015 fell steeply by 53.5 per cent from $20,750.76 million in 2014 to $9,643.01 million in 20152. This decline was largely driven by a substantial drop in portfolio investment (the largest component of Capital Inflows), which fell by 59.74 percent. The exclusion of Nigeria from the JP Morgan EM Bond index, the slump in crude oil prices, the decision of the US Federal Reserve to raise interest rates and the capital control measures imposed by the Central Bank of Nigeria (CBN) are the notable drivers of the reduced inflow of capital. Going forward, improving the business environment, especially easing foreign exchange controls, would determine the extent to which the economy can attract increased capital inflows.
Global oil price edged upwards in the review week. International crude benchmark, Brent, rose week-on-week by 3.1 percent to $50 per barrel as at July 21, 20173 a level it had not attained since June. The remarkable gains followed demand-side progress earlier statistics from China showed increase in crude imports, indicating prospects of higher demand. This was also complimented by the huge drop in US domestic crude production (Crude reserves fell by 4.7 million barrels). If the trend is sustained, Nigeria could record further rise in its Gross Federally Collected Revenue. Nevertheless, there remains a need for Nigeria to overcome the challenge of harnessing its oil and gas resources by making strategic policy choices andensuring coordination in policy implementation to minimize macroeconomic distortions.
Tax Collected: Tax revenue which has relatively maintained an upward trend, fell considerably in 2015 and dipped significantly in early 2016 on the account of economic downturn, as many businesses sev
This paper explores the issues relating to the establishment of a Sovereign WealthFund (SWF) in Nigeria consistent with best practices. Experience with established SWFssuggests that successful oil- based funds tend to be underpinned by a sound oil revenuemanagement framework. The paper thus discusses the underlying issues of oil revenuemanagement, the policy choices and SWF implementation issues.