Macroeconomic Report & Economic Updates

March 10, 2018

Nigeria Economic Update (Issue 6)

The federal government fiscal operations in 2017 shows that there were deficits for the four quarters recorded. The CBN report reveals that the federal government spent a total of N147.11 billion on capital expenditure in the four quarters (including a 2016 fiscal year roll-over due todelay in approving the 2017 budget), and N3.64 trillion as […]

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The federal government fiscal operations in 2017 shows that there were deficits for the four quarters recorded. The CBN report reveals that the federal government spent a total of N147.11 billion on capital expenditure in the four quarters (including a 2016 fiscal year roll-over due todelay in approving the 2017 budget), and N3.64 trillion as recurrent expenditure in 2017. Capital releases suggest that only about 6.6 percent of budgetary amount of N2.24 trillion was spent in the fiscal year, while recurrent expenditure represented 72 percent of N5.06 trillion budgeted
for the year. Nigeria’s recurrent expenditure has always exceeded capital expenditure for infrastructure, however, the delay in the passage of the 2017 budget (in June 2017) may have triggered the slow-down in capital releases. Nonetheless, the 2017 budget is still being followed, given that the 2018 budget has not been passed. Going forward, the process of the 2018 budget release should be expedited, as delay in budget sends negative signals to foreign investors which could make them divert capital investment to other countries.




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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.