If you continue to navigate this website beyond this page, cookies will be placed on your browser. To learn more about cookies, click here. The COVID crisis drove the economic slowdown; the external context was marked by capital outflows, intensified risk aversion, low oil prices, and shrinking foreign remittances. The Nigeria Development Update Resilience through Reforms states that reforms implemented by the Nigerian government were critical and timely to alleviate the impact of the recession on the economy and to create additional fiscal space.
The report discusses policy options to reduce inflation, protect the poor and vulnerable and support economic recovery. Accomplishing these goals will require a big push in exchange-rate management, monetary policy, trade policy, fiscal policy, and social protection. Some specific measures recommendations are the following:.
The Nigerian economy is expected to grow by 1. Central America. Monetary and Financial Sector. Precious Metals. Region Reports.
Country Reports. Annual Subscriptions. Nigeria Economic Outlook October 19, The economy likely grew at a softer pace in the third quarter. The PMI averaged lower in July—September compared to the prior quarter, suggesting that economic conditions improved at a reduced speed. Moreover, credit growth slowed on average in July—August, further pointing to cooling momentum. In other news, the country raised USD 4 billion in Eurobond sales in late September, partly to fund spending this year and to support the currency.
Nigeria Economic Growth The economy is forecast to expand at a faster rate next year as the impact of the health crisis continues to fade, supporting domestic and foreign demand.
However, the outlook is clouded by elevated inflation, tight FX liquidity, security issues and lingering pandemic-related uncertainty. Many erroneously believe that once we fix power, industrialisation will automatically happen. We have not begun to prepare to industrialise. On crude petroleum, it is basically an issue of capacity utilisation. Given the installed output capacity of more than 3 million barrels per day, anytime we increase output from say, 2 million barrels per day to, say 2.
On the demand side, the components of national expenditure present interesting dynamics. Many imponderables in the said report make me raise serious caveats on the reliability of the figures. Given the huge idle capacity and potentials of the Nigerian economy, it requires an annual investment rate of at least 40 per cent to jumpstart the road to prosperity. Our gross national saving rate averages 15 per cent, and investment rate is below that. For a country that is grossly undercapitalised to be a net exporter of savings capital flight abroad is serious.
NBS also gives a clue as to where the bulk of the miniscule investment is going. We also know that the foreign direct investment goes mostly to the enclave oil and gas sector. If it is not employment and investment, is it then productivity that drives growth?
I have not seen any empirical study that does not conclude that productivity in Nigeria is either negative or very low. Yes, we have over universities but the effective labour wage wage adjusted for productivity is not cheap. It is a common mistake to think that labour is cheap in Nigeria : it is not. Once you take account of productivity, labour in many respects can become very expensive.
The pool of skills per workers is very low. As a visiting professor in the US in late s, the entire administration of the Department of Economics was effectively run by one grandmother. Enough said for now! What is the quality of labour force produced by our educational system?
This brings us to the key conclusion. When oil price booms, domestic aggregate demand—largely consumption—spurs the rest of the economy.
Government expenditure grew at almost three times the growth of the economy! This is the issue. Note that government here refers to aggregate of all governments at federal, state and local governments. A collapse in oil prices also translates into catastrophic effects on the macro economy.
But we know that it is a fluke: no country has prospered in the long term that way. Your browser does not support the video tag.
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