Lagos — Goldman Sachs, an American investment bank, whose Economic Research Unit predicted that Nigeria would be one of the top 20 Economies by 2020, has forecast that the country's export revenue would rise to $90 billion (N10.6 trillion) this year.

It also said that the continuous increase in private capital inflows and Foreign Direct Investment (FDI) into Nigeria is a vote of confidence in the overall management of the country.

Given this scenario, Goldman Sachs, in its recently released report entitled "New Market Analyst", said the rise in Nigeria's oil and non-oil sector would sustain her growth and strengthen the currency.

"Investment has flowed not only into the oil sector but also into other areas of the economy, especially the financial sector. This did not occur in previous booms and is important both because of the economic development it will finance, and also as a vote of confidence in the overall economic management of the country. Hence, the oil and non-oil economy should both sustain strong growth," Goldman Sachs said.

Nigeria had earned $58 billion (N6.8 trillion) revenue from exports in 2006, indicating that in spite of the Niger Delta crisis that has disrupted oil operations, the country has been a major benefactor in the rise in the price of oil in the international market.

"Nigeria's financial picture has seen two important improvements in recent years. Most obviously, high oil prices have boosted export and fiscal revenues (despite declining production) and will continue to do so."

"We forecast that export revenues will surge to $90 billion in 2008 (from $58 billion in 2006) on the back of our commodities team's forecast that the oil price will approach $150 bbl by end of year," the report said.

It however, noted that inflation pressure will increase. "Although, the greatly improved financing picture should allow the central bank to counter this by allowing the currency to appreciate," it said.

Noting that Nigeria has continuously posted fiscal surpluses averaging 6 per cent in the past three years, Goldman Sachs said that given its view on oil prices, it expects Nigeria's revenue to remain strong and continue to outpace spending.

Acknowledging that Nigeria's growth has accelerated to an average of 7 per cent over the past five years, the report said that a number of factors have contributed to this turnaround.

It listed these factors to include improved macroeconomic policies, the rehabilitation of the country's financial sector and official debt relief and high commodity prices.

"But in order to sustain growth at a high level, the country will need to invest, both in the oil sector itself and in other areas of the economy. Part of the capital needed for this investment is likely to be accumulated through export revenues, which will in turn permit a higher level of domestic investment; foreign capital inflows, both private (foreign direct investment, remittances) and public (foreign aid) should provide a second source of financing.

"Lastly, in order to maintain economic stability and finance infrastructure spending, the government must be able to raise adequate revenues", the report said.