Macroeconomic Report & Economic Updates

November 16, 2017

Nigeria Economic Update (Issue 44)

Latest
Doing Business report by the World Bank ranks Nigeria as one of the top 10 economies
that showed notable improvements in doing business in 2016/2017. Precisely, the
report which presents quantitative indicators on business regulation compared
across 190 economies and ranked Nigeria 145th – up by 24 positions from
the previous report ranking, to reach its highest rank since 2013. This may not
be unexpected, given that it is consequent upon various business environment
reforms in 2016. Particularly, the Presidential Enabling Business Environment
Council (PEBEC) set up in 2016 enacted 31 reforms to improve
business(such as improving credit to small and medium-size
businesses) all of were enacted into law in May 2017.

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Related

 

Nigeria Economic Update (Issue 6)

Latest figures of FDI flows to Nigeria show a decline of 27 per cent from $4.7 billion in 2014 to $3.4 billion in 20152, representing its lowest value since 2005. This decline is largely attributed to the oil price slump, which has generally increased uncertainty in the economy, with adverse effects on investors confidence. The fall in FDI flows was witnessed in most resource based economies in Africa, as FDI flows to the continent fell by 31 percent in 2015. The forex controls in place in Nigeria has also exacerbated the uncertainty in economy, and created obstacles for both domestic and foreign investors. Thus a review of the forex restrictions could send positive signals to investors.

Infrastructure Financing In Nigeria:

Similar to most sub-Saharan African (SSA) countries, Nigeria has a huge infrastructure deficit which considerably limits efforts towards achieving inclusive growth, sustainable development, and poverty reduction. With infrastructure stock estimated at 20-25 per cent of Gross Domestic Product (GDP), Nigerias infrastructure stock is still significantly lower than the recommended international benchmark of 70 per cent of GDP. The 2014 National Integrated Infrastructure Master Plan (NIMP) estimates that a total of US$ 3 trillion of investments, or US$100 billion annually, is required over the next 30 years to bridge Nigerias infrastructure gap. In particular, the Plan estimates that Nigeria will have to spend an annual average of US$ 33 billion infrastructure investments for the period 2014 -2018. This means that Nigeria will have to more than double its spending on infrastructure from the current 2-3 per cent of GDP to around 7 per cent to make appreciable progress in infrastructure development over the next three decades.