A recently released CBN report indicates a weakened business outlook of -66.2 points for the month of May. The agriculture and service sectors are the worst hit, recording a decline in activity of -37.7 index point for May. According to the survey the pessimism is maintained in June as businesses expect an economic outlook of -4.22. The employment outlook is pessimistic across the construction, manufacturing, agriculture, and service sectors as employment is expected to decline by -18.5, -10.9, and -4.1 points respectively. The weakened outlook towards the macroeconomy results from limited economic activity with businesses that are import and/or export-oriented and those that are neither import nor export-oriented expressing pessimism. Considering that the factors that constrain business activity including power supply insufficiencies, access to finance and credit, high-interest rate, and insufficient demand are still present, the business outlook in the coming months is expected to continue to weaken considerably.
June 21, 2020
Nigeria Economic Update (Issue 23)
Related
Nigeria Economic Update (Issue 4)
The Naira/Dollar exchange rate remained
unchanged at ?199/$
in the official market but depreciated from ?263/$ to $267 at the Bureau De Change (BDC)
market segment this week. As the naira depreciates, the CBN forex
restriction measures continue to widen the gap between the official rate and
BDC, which has led to increased calls for naira devaluation. The International Monetary
Fund (IMF) and Business owners are among the major advocates for a relaxation
of the forex restrictions set by the CBN, in order to enhance the level of economic
activities.
Africa Economic Update (Issue 1)
Sub-Saharan Africa experienced its worst economic
performance in over two decades in 2016, with growth slowing to 1.5 percent.
The poor performance in South Africa and oil exporting countries is responsible
for attenuating regional growth rate, due to their high collective contribution
to regional GDP, despite robust performance in non-resource intensive countries.
Growth in Sub-Saharan Africa is projected to slightly improve in 2017 (2.9
percent) and further strengthen in 2018 (3.6 percent). At the sub-regional
level, growth prospect is estimated to be highest in West Africa (4.78
percent), attributable to 5.93 percent growth rate from West African Monetary
Union (WAEMU) Countries. East Africa is expected to grow at 4.5 percent,
Southern Africa 3 percent, and Central Africa 2 percent. Agricultural exporting
countries are projected to grow at around 7 percent, while oil producing
countries are estimated to grow at 1.9 percent, which indicates a recovery from
the negative growth recorded in 2016.
Nigeria Economic Update (Issue 21)
Nigerias domestic crude production increased significantly in April 2017. OPECs Month-on-Month data shows a 22.6 percent increase to 1.5 million barrels per day constituting the biggest increase among oil producing group. Crude production increased at the backdrop of completion of scheduled maintenance/repairs at the Bonga oil field, implying resumption of crude production by an additional 225,000 barrels. Remarkably, Nigeria is progressively moving towards meeting daily output benchmark/target (2.2 million barrels per day). Given recent boost in domestic crude oil production, considerable effort should be made to improve the countrys refining capacity in order to reduce fuel importation and conserve foreign exchange.