Macroeconomic Report & Economic Updates

March 10, 2018

Nigeria Economic Update (Issue 7)

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Month-on-Month analysis of food prices show that average prices of selected food items
reduced from December 2017 to January 2018. Precisely, total average month-on-month price
decreased from 2.48 percent to 1.19 percent, with reductions in unit prices of items such as
eggs, chicken, beef, rice, fish, and palm oil among others. Food prices which remains largely
volatile in the short term, may have reduced in the review period due to a slight fall in consumer
demand following the end of the festive period. Looking forward, the decline in food prices may
be short-lived in the absence of yield-enhancing investments that can sustain food
production/supply. Hence, the government should promote policies that alleviate the credit constraints to yield-enhancing investment in the private sector.



Public Debt-to-GDP Ratio

Public Debt-to-GDP Ratio: The ratio of Nigerias cumulative government debt to national GDP has maintained an upward trend indicating the countrys declining economic productivity and ability to repay

Nigeria Economic Update (Issue 1)

Nigerias external reserves improved in 2017. The reserve stood at approximately $39 billion as at the end of December 2017, up by about 50 percent from the $26 billion at the beginning of the year 20172. The surge in reserve was particularly boosted by increased capital importation, and crude revenue earnings prompted by a relatively higher crude oil price and improved domestic production. Given that the recent uptick in external reserves is still largely associated with improved crude oil price, efforts should be geared towards conserving current reserve gain so as to cushion future external shock. In the medium term, there is need to diversify export earning away from oil so as to mitigate the effects of volatility in crude oil prices.

Nigeria Economic Update (Issue 8)

The falling tide in the international value of Naira experienced a reversal in the review week with naira appreciating significantly by 11 percent from N516/$ on February 17, 2017 to N460/$ on February 24, 2017 at the parallel market the first appreciation since December 2016. The recent rise in naira value was driven by forex supply-demand gap closure, sequel to improvements in dollar liquidity. The recent CBN Special intervention (e.g. the auction and sale of $370 million and $1.5 million respectively, by the apex bank during the week) and its revised forex policy guidelinescontributed in dousing speculations in the parallel market, thus gradually narrowing the margin between the interbank and parallel market rates. Given that the sustainability of naira appreciation is strongly hinged on the improvement in foreign reserve which is largely dependent on crude oil sales, the government should continue its efforts at calming tensions in the Niger Delta region.