Macroeconomic Report & Economic Updates

May 26, 2016

Nigeria Economic Update (Issue 23)

Recent Data on Nigerias Real GDP growth rate (Year-on-Year)
declined by 2.47 percentage points, from 2.11 per cent in 2015Q4 to -0.36
percent in 2016Q11. This is the lowest GDP growth rate since 2004Q2
(-0.81 percent). The Oil sector continued to contract, as -1.89 percent growth
was recorded in 2016Q1. The negative growth witnessed in the oil sector was
likely driven by the fall in global oil prices by $9.732 and decline
in domestic crude oil production, relative to preceding quarter. Similarly, the
Non-oil sector witnessed a negative growth as it declined by 3.32 percentage
points from 3.14 percent in 2015 Q4 to -0.18 percent in 2016Q1. The underperformance in the non-oil sector was
driven by significant contractions in financial (by 17.69 percent), manufacturing
(by 8.77 percent), and real estate (by 5.48 percent) sub-sectors. Given that
the present economic fundamentals point to a likely recession in 2016Q2, the
government can stir economic activities by speeding up the budget
implementation process to spur growth in the non-oil sector and the economy at
large. More so, the domestic production shock in the oil sector needs to be
addressed to effectively leverage on the present marginal rise in crude oil
prices.

Download Label
March 13, 2018 - 4:00 am
application/pdf
528.19 kB
v.1.7 (stable)

Related

 

Nigeria Economic Update (Issue 5)

The Naira continued to depreciate in the review week. At the parallel market, naira exchanged for N498/$ on January 27, 2017 and N500/$ on February 3, 2017. Despite the weekly sales of forex to BDCs and the significant improvements in the external reserves, the naira has continued to lose value to other currencies. The pressure on the naira has been triggered by escalating scarcity of forex in the spot market, likely due to forex hoarding. However, in the preceding week, the CBN sold $660 million in forwards contract in an attempt to manage liquidity and stabilize the naira. In the face of growing speculation in the parallel market, the monetary authority should institute mechanisms that would discourage excessive forex hoarding among licensed BDC operators. An initiative that monitors transaction dealings in the parallel market would go a long way in detecting erring BDC operators.