Nigeria economy to Perform Better This Year

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A taxi cab passes a giant advertising screen showing US dollar, British pound and euro foreign currency exchange rates on a busy city road in Lagos, Nigeria, on Wednesday, July 26, 2017. Nigeria's economy, which in 2016 suffered its first full-year recession since 1987, will probably return to growth in 2017. Photographer: Tom Saater/Bloomberg

Economy

Tuesday, January 9,2018

E xperts have predicted better performance of the Nigerian economy in 2018.

A financial analyst and head of the department of banking and finance at the Nasarawa State University, Keffi, Uche Uwaleke, said there will be tangible improvements in the economy going by the various parameters that support the countries revenue sources such as oil prices, AllAfrica reported.

Uwaleke also predicted that the monetary policy rates may likely be retained by the Central Bank of Nigeria in its first quarter meeting. “Headline inflation, which is beginning to prove sticky downwards, will spike in January. In response, the Monetary Policy Committee members in their meeting of January will leave the policy parameters (namely the monetary policy rate at 14%, cash reserve ratio at 22.5% and liquidity ratio at 30%) unchanged.

“There will be no significant departure from this monetary policy stance even during the MPC meeting of March,” he predicted. He also said economic activities in the first quarter of 2018 will be slow, especially on the part of foreign investors.

“The level of capital importation, comprising mainly portfolio investments, will not be significant relative to the third and fourth quarters of 2017 since foreign investors are likely to adopt a wait-and-see attitude during this period.

“Expectedly, the stock market will largely be bearish. The first quarter of 2018 will be a good time for risk-taking investors to take positions in undervalued stocks. Overall, economic activities will progress at a snail’s pace in the first quarter with higher unemployment rate than the previous quarter, a little shy of 20%.

“Real GDP growth rate, year on year, will likely hit the 2% mark but it will be more from base effect than actual expansion in economic activities considering that the economy was still in recession during the corresponding period of the preceding year,” he said.

The financial analyst however forecast higher economic activities in the second quarter. “The economy will be at a cruising point during the second and third quarters of 2018. Much of the expansion in economic activities will occur during this period.

“Improvements in security and oil infrastructure will likely boost oil production up to the level (2.3 million barrels per day) envisaged in this year’s budget.

“The IMF has forecast a real GDP growth rate of 2.1% for Nigeria while the federal government’s target is 3.5% as contained in the budget. Real GDP growth will lie somewhere in-between.”

 

 

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