Nigeria Economic Outlook

[Pages:26]Nigeria Economic Outlook

Top 10 themes for 2019

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Nigeria Economic Outlook Top 10 themes for 2019

Disclaimer

This document has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law. PricewaterhouseCoopers Limited, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

Nigeria: Economic Outlook

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Global Economic conditions

Nigeria Economic Outlook Top 10 themes for 2019

Global economic outlook in 2019

The World Bank forecasts global growth to slow to 2.9% in 2019 from initial growth forecast of 3.5%

Global growth is forecast to plateau, while some major nations including the US and China are on track to see marginally slower rates of growth

The World Bank predicts growth in Sub-Saharan Africa to grow to 3.4%, due to improved investment in large economies and continued robust growth in non-resource intensive countries

A surge or sudden drop in the price of crude could pose problems for the World economy

Risks on the horizon from rising protectionism as the US imposes import tariffs on goods, as well as the rise of populist politicians in other countries

Geopolitical risks could also resurface, including an escalation of tensions of the Middle East

Besides the risks from Brexit, the US-

China trade war and fears of the US Fed

hiking rates, several other risks linger

Nigeria: Economic Outlook

on the sidelines for the World economy

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Nigeria Economic Outlook Top 10 themes for 2019

Top 10 Economies in Africa in 2018

2.5%

US$630.5 billion

Algeria

1.9%

US$1.121 trillion

Nigeria

-0.7%

US$197.9 billion

Nigeria: Economic Outlook

Angola

* Real GDP growth (2018); Nominal GDP (2017) * Nominal GDP based on PPP

Egypt

8.2%

US$1.13 trillion

Ethiopia

8.2%

US$199.3 billion

Kenya South Africa

5.9%

US$163.3 billion

1.7%

US$765.5 billion 5

Nigeria Economic Outlook Top 10 themes for 2019

Nigeria not among the fastest growing economies in Sub-Saharan Africa (SSA) by percentage growth in GDP

The largest economies in Sub-Saharan Africa offer opportunities for business growth, particularly when considering an expansion into new regions

Country

GDP growth rate Africa Rank

World Rank

Ethiopia Ghana Cote d'Ivoire Tanzania Senegal Djibouti

Source: World Bank, PwC analysis

10.3%

7th

8.1%

11th

7.7%

13th

7.1%

10th

7.2%

21st

7.0%

47th

67th 86th 91st 80th 117th 174th

Nigeria: Economic Outlook

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Top 10 Themes for Nigeria in 2019

Theme 1 Theme 2 Theme 3 Theme 4 Theme 5 Theme 6 Theme 7 Theme 8 Theme 9 Theme 10

Diaspora remittances continue to sustain the economy Economic growth sluggish characterised by slow recovery Government's fiscal deficit expands above budget Lackluster policy implementation impacts FDI & FPI flows Unemployment continues to trend upward Oil prices still low coupled with production cuts Inflation increases marginally, driven mainly by base effects Petrol prices may be re-adjusted from N145/litre Uncertainty around population and population growth rate The exchange rate depreciates in the latter part of the year

Nigeria Economic Outlook Top 10 themes for 2019

Diaspora remittances continues to support the economy...

Nigeria: Migrant remittance inflows (2005 - 2018), US$ million

30,000

20%

25,000 20,000

16,932

18,014

19,203

19,745

20,617

20,543

20,797

20,806

18,368

15,000 14,640

21,158

25,081

15%

22,001

19,679

10%

5%

? The Nigerian diaspora sent an estimated US$25 billion in remittances to the country in 2018, representing 6.1% of GDP

? This figure translates to 83% of the Federal Government budget in 2018 and 11 times the FDI flows in the same period

10,000

0%

? Nigeria's migrant remittance

inflows was also 7 times

larger than the net official

5,000

-5%

development assistance

(foreign aid) received in

0

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018e

-10%

2017 of US$3.359 billion

Source: KNOMAD, PwC analysis

Migrant remittance inflows (US$ million)

Growth rate (%)

Nigeria: Economic Outlook Leading countries worldwide by value of migrant remittance outflows comprise the United States,

8

Switzerland, Germany, Russia and China...

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