Nigeria is Africa’s most populous country, with an estimated population of 190.9 million; it also has the largest economy, estimated at $376 billion in 2017 (World Bank, 2017). The economy hinges critically on the service sector, while oil is relied upon as the main source of foreign earnings. Despite its huge potential, Nigeria has failed to translate its resource endowment and strategic economic and demographic positions into sustained economic development. In fact, the country’s performance is abysmally low with regard to key development indicators. A portion (46 per cent) of its huge population is poor by World Bank definitions, and socioeconomic outcomes remain among the worst globally (World Bank, 2017). Specifically, Nigeria has the highest number of out-of-school children in the world (13 million in 2018), coupled with high rates of infant and maternal mortality (figure 1). Furthermore, the country suffers from inadequate and dilapidated infrastructure across the energy, housing and transport sectors. This is in relation to about $30 billion in budgeted spending for the 2018 fiscal year by the federal government, which reflects the enormous development financing challenges (Federal Ministry of Budget and National Planning, 2018). Despite these poor development indicators, the country has made modest progress in improving revenue streams, with recent developments in sectors other than oil such as the agriculture and mineral sectors.
Available data shows that headline inflation reduced in most countries in the region in May 2017 relative to preceding months. Notably, headline inflation decreased in Nigeria (16.25 percent), Ghana (12.26 percent), Tanzania (6.1 percent), Senegal (1.8 percent), Namibia (6.3 percent) and Rwanda (11.7 percent), while it grew in South Africa (5.4 percent), Kenya (11.7 percent), Ethiopia (8.7 percent) and Uganda (7.2 percent). Cote dIvoire (-0.4 percent) recorded consumer price deflation. The decrease in consumer price in Nigeria, Tanzania and Ghana can be attributed to decreases in both food and non-food components of inflation. Regionally, all countries in Southern Africa recorded single digits inflation, however consumer price marginally increased in South Africa, for the first time in 2017 owing to spike in food prices6, and Botswana (both by 0.1 percent).
Naira appreciated in the week under review. At the parallel market, naira gained 0.54 percent to exchange at N368/$ on June 23, 20175. This is at the backdrop of injections into the forex market by the CBN to the tune of $195 million at the beginning of the review week, to meet various forex demands. This is amid a slight week-on-week increase in the external reserves (by 0.1 percent to $30.23 billion). Despite the recent naira appreciation, the long-term prospects seem bleak given that the ongoing intervention that seeks to stabilize naira by depleting reserves is unsustainable.
Capital Importation: Since the dramatic decline in 2013, private and government sector investments in the sector have remained low in 2016. Budgetary Allocation: Budgetary allocations to the transpo