Macroeconomic Report & Economic Updates

Recently released demographic figures by the NBS shows an upward progression in population and its composition. Specifically, Nigeria’s population reached 193 million in 2016, growing at an annual average of 3.25 percent¹. Going by the demographic characteristics, the population pyramid reveals that over 41 percent of the population lies between ages 0-14 – a composition of children and adolescents. This implies that fertility rate has been high, as such, a corresponding high dependency ratio. The growing share of this population age imposes supply pressure on available infrastructural amenities; from education to health systems. Similarly, the growing youth population (16-30 years) exerts pressure on the labor market, given their working-class ages

As expected, the Monetary Policy Committee left the policy interest rate (MPR) and other parameters unchanged. At 14 percent, the MPR has been left unchanged for the 10^th consecutive period¹; likewise the CRR at 22.5 percent, Liquidity Ratio at 30.0 percent; and Asymmetric corridor at +200 and -500 basis points around the MPR. All except one member of the MPC agreed to keep rates on hold, mainly in anticipation of a more precise direction of key macroeconomic indicators, including the passage and implementation of the 2018 budget. Complementary factors considered for the hold also points to the current moderation in inflation rate towards single digit, as well as higher reserve levels

Recently released GDP report for the first quarter of 2018 shows a stronger growth in GDP, relative to the corresponding quarter of 2017. Driven particularly by growth in the Oil sector, Real GDP grew by 1.95 percent (Year-on-Year) in 2018Q1¹. In terms of sectoral growth, oil sector rose remarkably to 14.77 percent, a 30.37 percent increase from 2017Q1. Non-oil sector grew by 0.76 percent (Year on Year), slightly up from 0.8 percent- this marginal increase was driven mainly by Agriculture (Crop production), in addition to Manufacturing, Financial institutions and insurance, Transportation and Storage, and Information and Communication

Capital imported into Nigeria, maintained an upward trajectory in 2018Q1, following three consecutive quarterly increase. Specifically, capital importation rose to $6.30 billion in 2018Q1¹- a remarkable Year-on-Year growth of 594 percent (from $908.27 million), and Quarter-over-Quarter increase of 17 percent ($5.38 billion). Inferably, investors’ interest and confidence in the Nigerian economy have continued to soar since 2017Q2; this is particularly represented by the extent of portfolio investment flows which increased approximately fifteen times more than the $313.61 million recorded in the corresponding 2017Q1 quarter, and accounted for 72.4 percent of total capital importation in the review quarter

According to the World Bank, poverty level in Nigeria increased in 2017 with almost half the Nigerian population living in extreme poverty. As stated in the “Nigeria Biannual Economic Update” report, approximately 49.2 percent of Nigeria’s population live below the PPP $1.90 per capita per day poverty line in 2017¹ – an uptick of 0.8 percentage points. Particularly important is that despite emergence from recession in 2017, poverty and unemployment levels increased. The World Bank suggests that prospects for poverty reduction have been jeopardized by limited connective infrastructure, and policy makers’ inability to identify interventions best suited for development potentials.