25 February 2016

Nigeria: Economic Indicators Remain Worrisome As Recession Looms

An analysis of Nigeria's economic indicators has shown that there is a cause to worry even as they point to looming recession.

Business confidence stood at 8.3 per cent as at the end of last year, down by 6.6 per cent from 14.9 per cent recorded at the third quarter of 2015.

As at the last quarter of 2015, consumer confidence in Nigeria dropped to -3 from -1.9 recorded the previous quarter.

On competiveness and corruption rankings, Nigeria's economy continues to attract negative attention.

As at December last year, Nigeria occupies the ranks of 124 and 136 on competitiveness and corruption indexes from 127 and 170 positions respectively the country occupied the previous year.

Latest statistics on the nation's Gross Domestic Product (GDP) growth rate show that the economy grew at 9.19 per cent by the end of September last year from 2.57 per cent recorded in the previous quarter.

During the same period, unemployment grew at a rate of 9.9 per cent from 8.2 per cent recorded at the previous quarter.

As at last month, the nation's inflation rate stood steady at 9.6 per cent from the same rate recorded in December 2015.

While interest rate is 11 per cent, government debt to GDP was 10.5 per cent in 2014 as against 11 per cent recorded the previous year.

Manufacturing production rate dropped to -0.3 per cent at the second quarter of last year from -0.7 per cent recorded the previous quarter.

The macroeconomic forecasts published recently by the National Bureau of Statistics (NBS) on the nation's major economic indicators from this year to 2019 brings glimmer of hope that the economy may rebound in the near future.

Nigerian economy is expected to grow yearly by an average of 5.41 per cent between 2017 and 2019, the projection revealed.

"In the near term, the reset may not yield fruits as quickly as Nigerians expect. Economic growth in 2016 is expected to increase to 3.78% from 2.97% in 2015, an increase of less than 100 basis points," the projection revealed.

The NBS projects that beyond 2016, growth is expected to be recorded as infrastructure developments take shape and provide support for both the oil and non-oil sectors.

The report also predicted that inflation rate may rise from the current 9.6 per cent to 10.16 per cent in 2016.

However, the rate is expected to moderate beyond this year and average 9.01 per cent between 2017 and 2019.

The projections indicated that the value of total trade is expected to slow in 2016, increasing by 2.41 per cent as a result of moderations in imports and exports.

Meanwhile, beyond 2016, both imports and exports are expected to increase and total merchandise trade is expected to average 15.61 per cent growth during the period.


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