Nigeria Economic Forecast

Nigeria Economic Outlook

August 25, 2020

The economy likely contracted sharply in Q2 as the Covid-19 outbreak and oil price plunge took their toll. Secondary sources show that oil output declined steadily through the quarter in line with the OPEC+ production cut deal. Moreover, recently released labor market data showed that the unemployment rate climbed to its highest level in roughly a decade in Q2, which, coupled with higher inflation, should have weighed heavily on private consumption. Turning to Q3, although July’s PMI pointed to an improvement in business conditions for the first time since March, the gain was marginal and firms continued to cut employment. In addition, oil cuts will likely remain steep in Q3 as the country compensates for previous under compliance. Complicating matters, approval for a much-needed USD 1.5 billion World Bank loan is reportedly facing delays on lingering reform concerns.

Nigeria Economic Growth

The pandemic and oil price shock is set to plunge the economy into a severe recession this year. Considerable job and income losses as well as likely lower remittances will hamper consumer spending, while business investment will be hammered due to greater uncertainty. Tighter FX liquidity, mounting inflationary pressures and subdued global demand cloud the outlook. FocusEconomics panelists see GDP contracting 3.4% in 2020, which is down 0.1 percentage points from last month’s estimate, and growing 2.3% in 2021.

Nigeria Economy Data

2015 2016 2017 2018 2019
Population (million)181186191196201
GDP per capita (USD)2,7442,2141,9572,1832,363
GDP (USD bn)497412374428475
Economic Growth (GDP, annual variation in %)2.8-
Consumption (annual variation in %)-  -  -  -  -  
Investment (annual variation in %)-1.3-4.8-
Industrial Production (annual variation in %)-3.4-9.40.9-4.87.5
Unemployment Rate4.
Fiscal Balance (% of GDP)-3.2-4.0-5.4-4.3-  
Public Debt (% of GDP)20.323.425.327.2-  
Money (annual variation in %)5.917.82.312.16.3
Inflation Rate (CPI, annual variation in %, eop)9.618.615.411.412.0
Inflation Rate (CPI, annual variation in %)9.015.716.512.111.4
Policy Interest Rate (%)11.0014.0014.0014.0013.50
Exchange Rate (vs USD)196.5304.5305.5306.5307.0
Exchange Rate (vs USD, aop)192.6253.2305.3305.6306.6
Current Account (% of GDP)-
Current Account Balance (USD bn)-15.42.710.43.9-17.0
Trade Balance (USD billion)-6.4-0.513.120.52.9
Exports (USD billion)45.934.745.861.265.0
Imports (USD billion)52.335.232.740.862.1
Exports (annual variation in %)-44.4-24.432.033.66.1
Imports (annual variation in %)-15.0-32.7-7.324.752.4
International Reserves (USD)29.125.838.843.138.6
External Debt (% of GDP)

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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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