Nigeria Business Forecast Report Q4 2013

Date: July 24, 2013
Pages: 47
Price:
US$ 1,195.00
Publisher: Business Monitor International
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: N0BAC16F41BEN
Leaflet:

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Core Views

The performance of the export sector, and the wider economy, will depend on the success of the government’s efforts to address security risks on a number of fronts. Our core scenario is that, while headwinds will persist, growth will pick up slightly in 2013 compared to 2012.

Economic and social disparities between the northern and southern states have yet to show signs of closing, although there has been a recent increase in cooperation between northern communities and federal security forces to fight extremism.

Major Forecast Changes

We have made a slight downward adjustment to our current account forecast based on revisions to the Central Bank of Nigeria’s historical data and the most recent figures released for Q113. We are projecting a surplus of 7.6% of GDP in 2013, compared to our earlier estimate of 8.4%.

Key Risks To Outlook

The volatility of the price of oil poses a significant risk to export revenues and government receipts. A significant deterioration in the economies of Europe, the US or other major markets could see the price again head below our current projections, with negative implications for Nigeria’s economy. While we believe that security risks will eventually be contained, if the situation significantly deteriorates, this would potentially affect investment, exports and growth.
Executive Summary
Core Views
Major Forecast Changes
Key Risks To Outlook

CHAPTER 1: POLITICAL OUTLOOK

SWOT Analysis
BMI Political Risk Ratings
Domestic Politics
On Multiple Fronts, A Country Divided
On a number of different fronts, deep divisions remain between Nigeria's rapidly growing, economically vibrant southern states, and the restive, economically struggling areas in the north. This has persisted, and in some cases worsened, despite long-standing government acknowledgment of the problem, and efforts to reverse the trend.
Long-Term Political Outlook
'Failed State' Or African Powerhouse?
Following elections in April 2011, Nigeria is facing a number of challenges over the coming decade. This poll were largely successful, giving the country an opportunity to exorcise the embarrassing experience of 2007 when elections were riddled with what the EU described as 'rampant vote rigging, violence, theft of ballot boxes and intimidation', and claim Nigeria's place as a regional leader and economic powerhouse.
  Table: POLITICAL OVERVIEW

CHAPTER 2: ECONOMIC OUTLOOK

SWOT Analysis
BMI Economic Risk Ratings
Economic Activity
Growth Outlook A Mixed Bag
The Nigerian economy still faces major headwinds in the crucial oil and gas sector, but other sectors, notably agriculture, have started to pick back up. We are forecasting real GDP growth of 6.7% in 2013, a rate below Nigeria's substantial potential but a slight improvement on the previous year.
  Table: ECONOMIC ACTIVITY
Fiscal Policy
CapEx Targets Unrealistic, But Overall Spending To Rise
The latest data released by Nigeria's Budget Office support our view that the capital spending targets set by the government for the year are likely to prove too ambitious, particularly in light of new spending priorities amid escalating military operations. We have downwardly adjusted our overall fiscal balance projection based on declining revenues and upward pressure on recurrent expenditures.
  Table: FISCAL POLICY
Balance Of Payments
Data Spurs Downgrade, But Surplus Still Wide
We have made a slight downward adjustment to our current account forecast for Nigeria based on revisions to the Central Bank of Nigeria's historical data and the most recent figures released for Q113. We are projecting a surplus of 7.6% of GDP in 2013, compared to our earlier estimate of 8.4%.
  Table: CURRENT ACCOUNT
Monetary Policy
CBN Holds Amid Potential Upward Fiscal Pressure
The Central Bank of Nigeria has decided to hold its benchmark interest rate at 12.00% , where it has been since October 2011, despite falling inflation. Officials are concerned about potential upside risks to price growth in the months ahead, stemming from a decline in agriculture production, security-related disruptions and increased government spending.
  Table: MONETARY POLICY

CHAPTER 3: 10-YEAR FORECAST

The Nigerian Economy To 2022
Infrastructure Investment Is Key
We are forecasting average annual real GDP growth of 7.1% over the next 10 years. We expect the Nigerian government to prioritise investment in vital infrastructure through the end of our forecast period and beyond. At the same time, we project that the country will develop the beginnings of a stronger domestic manufacturing sector by 2022.
  Table: LONG-TERM MACROECONOMIC FORECASTS

CHAPTER 4: BUSINESS ENVIRONMENT

SWOT Analysis
BMI Business Environment Risk Ratings
Business Environment Outlook
  Table: BMI BUSINESS AND OPERATION RISK RATINGS
  Table: BMI LEGAL FRAMEWORK RATING
  Table: LABOUR FORCE QUALITY
  Table: AFRICA – ANNUAL FDI INFLOWS
Infrastructure
  Table: TRADE AND INVESTMENT RATINGS
  Table: TOP EXPORT DESTINATIONS, US$MN, 2001-2009
Operational Risk
CHAPTER 5: KEY SECTORS
Telecommunications
  Table: TELECOMS SECTOR – MOBILE – HISTORICAL DATA & FORECAST
  Table: TELECOMS SECTOR–FIXED-LINE–HISTORICAL DATA & FORECAST
  Table: TELECOMS SECTOR–ARPU–HISTORICAL DATA & FORECAST
  Table: TELECOMS SECTOR–INTERNET–HISTORICAL DATA & FORECAST
Pharmaceuticals
  Table: NIGERIA GENERICS DRUG MARKET INDICATORS, HISTORICAL DATA & FORECASTS
  Table: NIGERIA OVER-THE-COUNTER (OTC) MEDICINE MARKET INDICATORS, HISTORICAL DATA & FORECASTS
  Table: PRESCRIPTION DRUG MARKET INDICATORS, HISTORICAL DATA AND FORECASTS
Other Key Sectors
  Table: OIL AND GAS SECTOR KEY INDICATORS
  Table: PHARMA SECTOR KEY INDICATORS
  Table: TELECOMS SECTOR KEY INDICATORS
  Table: DEFENCE AND SECURITY SECTOR KEY INDICATORS
  Table: INFRASTRUCTURE SECTOR KEY INDICATORS
  Table: FOOD AND DRINK SECTOR KEY INDICATORS
  Table: AUTOS SECTOR KEY INDICATORS
  Table: FREIGHT SECTOR KEY INDICATORS
CHAPTER 6: BMI GLOBAL ASSUMPTIONS
Global Outlook
Growth Has Troughed
  Table: GLOBAL ASSUMPTIONS
  Table: DEVELOPED STATES, REAL GDP GROWTH,%
  Table: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS,%
  Table: EMERGING MARKETS, REAL GDP GROWTH,%
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