May 12, 2020

Nigeria Economic Update (Issue 16)

The recent World Economic Outlook (WEO) report released by the International Monetary Fund (IMF) reveals that Nigeria’s economy will contract to -3.4% in 2020, falling from 2.2% projected in 2019.1 The Fund’s projection takes into cognizance the large drop in oil prices and impact of containment and mitigation measures on economic activities. The report also projects inflation to rise from 11.4% to 13.4%, government debt as a percent of GDP to increase from 29.4% to 35.3% and external reserves to fall from 6.1 to 3.9 months of import between 2019 and 2020. However, GDP and inflation are expected to rebound to 2.4% and 12.4% respectively in 2021. Going forward, the impact of the COVID-19 pandemic, through business travel and tourism, supply chains, commodities and lower confidence, will worsen the already bleak economic outlook. Nigeria’s economy will be particularly hard hit considering the intensity of the impact on China, a notable trading partner. The government should consider as priority, fiscal stimulus packages for the affected industries and workers and boost investment to accelerate recovery.  




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Nigeria Economic Update (Issue 34)

Recent NBS data shows a significant decline in power generated in 2016Q2. Precisely, power generated declined by 31 percent (quarter on quarter) from a total quarterly average of 92,352 MWH in 2016Q1 to 63,692.39 MWH in 2016Q2. Remarkably, the reoccurrences of pipeline vandalism in 2016Q2 prompted the shortage of gas for power generation. Thus, there were about eight recorded system collapses in the quarter which led to several days of power outages. However, subsequent quarterly declines in power generation could be averted if efforts to repair vandalized pipelines and adopt hydro sources are intensified.