February 19, 2021

Nigeria Economic Update (Issue 6)

The International Monetary Fund (IMF) projects that Nigeria’s fiscal balance is estimated to increase considerably. More specifically, general government deficit is projected to widen from 4.8 to 5.9 percent of GDP between 2019 and 2020.1 Also, public debt is projected to increase substantially to 34 percent of GDP in 2020 from 29.1 percent in 2019. The increase in government general deficit can be attributed to sharp revenue declines occasioned by the pandemic. Although revenue could increase given the increase in the Value Added Tax (VAT) rate from 5 to 7.5 percent in 2020, and expenditure savings from the removal of power sector and fuel subsidies, the concurrent increase in expenditure related to COVID-19 emergency support will drive the widening fiscal deficit. However, as domestic activities recover to pre-COVID levels and spending on household and businesses vulnerable to the pandemic tapers down, the fiscal deficit is projected to narrow in 2021.

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Nigeria Economic Update (Issue 38)

Recent NBS data on Nigerias real GDP growth rate declined from -0.36 percent in 2016Q1 to -2.06 percent in 2016Q2. With negative GDP growth rate in two consecutive quarters, Nigeria records its first recession in 23 years. Both the oil and non-oil sectors continued to contract by -15.59 and -0.20 percentage points, respectively, relative to preceding quarter. The worsening growth rate in the oil sector was largely driven by the decline in domestic crude oil production by 14.5 percent relative to preceding quarter