City in Nigeria

Nigeria Economic Forecast

Nigeria Economic Outlook

GDP growth likely accelerated in Q4 2022, as PMI data revealed that business conditions improved at a stronger pace than in Q3. The Central Bank’s demonetization plan has led to a cash shortage, sparking protests that have disrupted activity. Following a lawsuit by various states, the Supreme Court temporarily suspended a ban on the use of old, high-denomination bank notes, leading the government to extend the period to exchange them until 10 April. Meanwhile, on 31 January the president’s request for an NGN 1 trillion (around USD 2.2 billion) loan from the Central Bank to fund the 2022 supplementary budget was approved. In recent weeks, Moody’s downgraded the country’s credit rating to ‘Caa1’ and S&P Global Ratings downgraded the outlook to negative, citing they expected the government’s fiscal position to deteriorate further. In the political arena, the country will hold presidential and legislative elections on 25 February.

Nigeria Inflation

Inflation surprised markets on the upside in January, accelerating to 21.8% (December: 21.3%), the highest print since September 2005. Stronger price increases for food drove the rate further above the upper bound of the Central Bank’s 6.0–9.0% target range. Inflation is set to gradually moderate in 2023, but currency depreciation is an upside risk.

Nigeria Economic Data

2017 2018 2019 2020 2021
Population (million) 191 196 201 206 211
GDP (USD bn) 373 421 475 430 440
GDP per capita (USD) 1 2 2 2 2
GDP (NGN bn) 114 129 145 154 176
Economic Growth (Nominal GDP, ann. var. %) 12.0 12.3 12.8 5.9 14.1
Economic Growth (GDP, ann. var. %) 0.8 1.9 2.3 -1.9 3.4
Domestic Demand (ann. var. %) -1.4 7.3 1.0 0.3 15.2
Private Consumption (ann. var. %) -0.4 4.6 -1.1 -1.7 25.6
Government Consumption (ann. var. %) -12.4 39.9 8.8 61.6 -34.0
Fixed Investment (ann. var. %) -3.0 9.7 8.3 -14.7 4.7
Exports (G&S, ann. var. %) 8.2 -0.9 15.0 -33.4 -32.1
Imports (G&S, ann. var. %) 4.8 49.2 27.3 -61.9 44.4
Industry (ann. var. %) 2.1 1.9 2.3 -5.8 -0.5
Oil Production (mn barrels per day, aop) 1.90 1.92 2.00 1.78 1.60
Unemployment (% of active population, aop) 17.5 22.6 - - -
Fiscal Balance (% of GDP) -5.4 -4.3 -4.7 -5.6 -6.0
Public Debt (% of GDP) 25.3 27.7 29.2 34.5 36.6
Money (ann. var. of M2 %) 2.3 12.1 6.3 31.4 17.5
Inflation (CPI, ann. var. %, eop) 15.4 11.4 12.0 15.8 15.6
Inflation (CPI, ann. var. %, aop) 16.5 12.1 11.4 13.2 17.0
Monetary Policy Rate (%, eop) 14.00 14.00 13.50 11.50 11.50
Stock Market (ann. var. of NSE %) 46.1 -18.9 -16.9 39.2 2.3
Exchange Rate (NGN per USD, eop) 307 308 307 381 412
Exchange Rate (NGN per USD, aop) 308 307 307 359 400
Current Account Balance (USD bn) 13.6 7.3 -13.7 -16.0 -1.8
Current Account Balance (% of GDP) 3.6 1.7 -2.9 -3.7 -0.4
Merchandise Trade Balance (USD bn) 13.1 20.5 2.9 -16.4 -3.2
Merchandise Exports (USD bn) 45.8 61.2 65.0 35.9 46.9
Merchandise Imports (USD bn) 32.7 40.8 62.1 52.3 50.1
Merchandise Exports (ann. var. %) 32.0 33.6 6.1 -44.7 30.4
Merchandise Imports (ann. var. %) -7.3 24.7 52.4 -15.7 -4.3
Foreign Direct Investment (USD bn) 2.4 0.8 2.3 2.4 4.8
International Reserves (USD bn) 38.8 43.1 38.6 35.4 40.5
International Reserves (months of imports) 14.2 12.7 7.5 8.1 9.7
External Debt (USD bn) 45.8 54.2 60.0 70.5 76.2
External Debt (% of GDP) 12.3 12.9 12.6 16.4 17.3

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