The manufacturing Purchasing Managers’ Index (PMI) declined in January to 59.2, indicating a 2.63% fall from the month of December1. The slowdown in sectoral expansion was driven by a decline in the non-metallic mineral products, printing and related support activities. Similarly, slower growth was also observed in the non-manufacturing PMI which fell to 59.6, a 5% decline from the preceding month. In the same vein, the Confidence Index (CI) in the month of January which indicates the respondent’s level of optimism on the overall macroeconomy tapered at 28.3 index points. However, the outlook for February is more optimistic at 61.4 index points and is driven mainly by prospects in the service and industrial sectors2. Going forward, we expect that the drop in the PMI will be reversed, at least minimally, as banks continue to lend to the real sector. However, the extent to which the increment will be sustained will depend on inflation levels as well as job creation growth rate in the short to medium-term.
February 21, 2020
Nigeria Economic Update (Issue 5)
Recent media highlights suggest that there is a prospective decrease in Nigerias budgetary benchmark crude oil production. Precisely, the 1.8 million barrels per day proposed at the Joint OPEC and Non-OPEC Ministerial Monitoring Committee (JMMC) meeting, is 18.2 percent lower than the budgetary production benchmark of 2.2 million barrels per day. This followed OPECs recent review to include Nigeria in the ongoing production cut agreement amid concerns of global oil market oversupply, given the constant production increase from Nigeria over the last few months.
Appropriation Act (Budget): Capital expenditure remarkably increased in 2016 relative to preceding year, on the account of the present governments renewed commitment to infrastructure development.