Nigeria Economic Forecast

Nigeria Economic Outlook

January 28, 2020

The economy likely gathered further momentum in the final stretch of 2019, on the heels of accelerating growth in the third quarter amid quickening activity in the non-oil economy. Bank lending to both households and businesses picked up markedly in October–November, boding well for consumption. Moreover, the PMI edged higher in Q4 from Q3 on sustained new business and employment growth. Coupled with firms growing more confident about overall economic conditions—reaching the highest level of 2019 in December—and over their own operations in the quarter, particularly in the key industrial and services sectors, indicates improved private-sector dynamics at the closing of 2019. Meanwhile, in a bid to shore up non-oil revenue and improve the business environment, President Muhammadu Buhari signed into law a finance bill in mid-January which raises the VAT rate from 5.0% to 7.5%, though exempting it on certain foodstuffs, and provides tax breaks for small businesses.

Nigeria Economic Growth

Economic growth is seen strengthening only slightly this year, mainly driven by firmer household spending on the back of the minimum wage hike. Conditions remain challenging, however, with overall activity weighed on by power shortages, elevated unemployment, high inflation, insecurity and a more subdued global economy. FocusEconomics panelists see GDP growing 2.5% in 2020, which is up 0.1 percentage points from last month’s estimate, and 2.7% in 2021.

Nigeria Economy Data

2014 2015 2016 2017 2018
Population (million)174181186191196
GDP per capita (USD)3,2712,6992,1551,9512,134
GDP (USD bn)569489401372418
Economic Growth (GDP, annual variation in %)6.22.8-1.60.81.9
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)13.4-1.3-4.8-3.09.7
Industrial Production (annual variation in %)6.0-3.4-9.40.9-4.8
Unemployment Rate4.45.36.26.06.0
Fiscal Balance (% of GDP)-2.1-3.5-4.0-5.4-4.5
Public Debt (% of GDP)17.520.323.425.327.3
Money (annual variation in %)20.65.917.82.312.1
Inflation Rate (CPI, annual variation in %, eop)8.09.618.615.411.4
Inflation Rate (CPI, annual variation in %)8.19.015.716.512.1
Policy Interest Rate (%)13.0011.0014.0014.0014.00
Exchange Rate (vs USD)167.5196.5304.5305.5306.5
Exchange Rate (vs USD, aop)156.5192.6253.2305.3305.6
Current Account (% of GDP)0.2-3.20.72.81.3
Current Account Balance (USD bn)1.3-15.42.710.45.3
Trade Balance (USD billion)21.0-6.4-0.513.122.3
Exports (USD billion)82.645.934.745.863.1
Imports (USD billion)61.652.335.232.740.8
Exports (annual variation in %)-13.2-44.4-24.432.037.7
Imports (annual variation in %)19.9-15.0-32.7-7.324.7
International Reserves (USD)34.529.125.838.843.1
External Debt (% of GDP)1.72.22.85.16.0

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Nigeria Facts

Value Change Date
Bond Yield11.100.0 %Dec 31
Exchange Rate306.53.08 %Jan 01
Stock Market0.10.0 %Jan 07

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