Nigeria: Nigeria Outlook for 2013-17

The country (Nigeria) is situated in Western Africa and bordering the Gulf of Guinea, between Benin and Cameroon. It has borders with Niger for 1497 km, Benin for 773 km, Cameroon for 1690 km and Chad for 87 km.
Land in Nigeria is southern lowlands merge into central hills and plateaus; mountains in southeast, plains in north. Nigerian land covers an area of 923768 km²

The climate is varies, is equatorial in the south and tropical in center and arid in north. Nigerian(s) speak English (official), Hausa, Yoruba, Igbo (Ibo), Fulani.

Overview

The major threat to political stability is the Islamist militancy in the north of Nigeria. However, there are as well various social tensions that frequently provoke violent unrest in other parts of the country. Despite instability in the north, the president, Goodluck Jonathan, and his People's Democratic Party (PDP) will remain in power at least until the next elections, in 2015.

Better opposition unity could mean closer election results. Economic expansion will be buoyed by the robust performance of the non-oil sector. Real GDP increase is expected to average around 7% in 2014-17. Fiscal spending, particularly current spending, will prove difficult to cut given political considerations. Lower oil prices later in the estimate period will hit revenue, and the deficit is expected to increase. Stronger economic increase and higher non-oil commodity prices will lead to an increase in inflation in the second half of the estimate period. The current-account surplus will narrow as a share of GDP during the estimate period as oil export increase is outpaced by import increase. Slow increase in oil production and lower prices in 2016-17 will limit exports.

Political outlook

A split has emerged in the PDP with seven national governors and a former presidential candidate forming a splinter group opposed to Mr Jonathan. This represents a critical threat to Mr Jonathan's putative bid to seek re-election.

Economic policy outlook

Most bidders for national electricity generation and distribution companies have completed payment for the assets and are set to take over the utilities. However, a rapid turnaround of the sector is unlikely given the large challenges faced, such as a decrepit transmission network.

Economic forecast

The federal government is seeking financial advisers for a US$100m diaspora bond it is planning to issue by the end of this year. This is part of plans to increase foreign deficit as a proportion of total deficit from around 14% to 40% in the medium term.

Outlook for 2013-17

• The major threat to political stability is the Islamist militancy in the north of Nigeria. However, there are as well various social tensions that frequently provoke violent unrest in other parts of the country.
• Despite instability in the north, the president, Goodluck Jonathan, and his People's Democratic Party (PDP) will remain in power at least until the next elections, in 2015. Better opposition unity could mean closer election results.
• Fiscal spending, particularly current spending, will prove difficult to cut given political considerations. Lower oil prices later in the estimate period will hit revenue and the deficit is expected to increase.
• Economic expansion will be buoyed by the robust performance of the non-oil sector, although 2013 will be a difficult year given unfavourable world prospects. Real GDP increase is again expected to average around 7% in 2014-17.
• Stronger economic increase and higher non-oil commodity prices will mean inflation increases in the second half of the estimate period.
• The current-account surplus will narrow as a share of GDP during the estimate period as oil export increase is outpaced by import increase. Slow increase in oil production and lower prices in 2016-17 will limit exports.

Review

• A split has emerged in the PDP with seven national governors and a former presidential candidate forming a splinter group opposed to Mr Jonathan. This represents a critical threat to Mr Jonathan's putative bid to seek re-election.
• The Nigerian military has claimed that senior members of the Boko Haram rebel group, inclunding its leader, have been killed. Even if confirmed, the killings are unlikely to improve stability in northern Nigeria, which will be additional reliant on issues such as boosting economic development.
• A job creation survey by the National Bureau of Statistics highlighted the issue that a lack of economic opportunities is most severe in the northern states affected by Islamist insurgency.
• Most bidders for national electricity generation and distribution companies have completed payment for the assets and are set to take over the utilities. However, a rapid turnaround of the sector is unlikely given the large challenges faced, such as a decrepit transmission network.
• The federal government is seeking financial advisers for a US$100m diaspora bond it is planning to issue by the end of this year. This is part of plans to increase foreign deficit as a proportion of total deficit from around 14% to 40% in the medium term.