Nigeria Economic Outlook PwC

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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 2,Global Economic,conditions. Nigeria Economic Outlook,Top 10 themes for 2019,Global economic outlook in 2019. The World Bank forecasts global The World Bank predicts growth in. growth to slow to 2 9 in 2019 from Sub Saharan Africa to grow to 3 4. initial growth forecast of 3 5 due to improved investment in large. economies and continued robust,growth in non resource intensive. Global growth is forecast to plateau A surge or sudden drop in the. while some major nations including price of crude could pose. the US and China are on track to see problems for the World economy. marginally slower rates of growth, Risks on the horizon from rising Geopolitical risks could also.
protectionism as the US imposes import resurface including an escalation. tariffs on goods as well as the rise of of tensions of the Middle East. populist politicians in other countries,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 4. Nigeria Economic Outlook,Top 10 themes for 2019,Top 10 Economies in Africa in 2018. 2 5 Algeria,US 1 13 trillion,US 630 5 billion,US 199 3 billion. 1 9 Nigeria,US 1 121 trillion,US 163 3 billion,0 7 Angola.
US 197 9 billion,South Africa, Nigeria Economic Outlook Real GDP growth 2018 Nominal GDP 2017. US 765 5 billion 5,Nominal GDP based on PPP,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 10 3 7th 67th. Ghana 8 1 11th 86th,Cote d Ivoire 7 7 13th 91st,Tanzania 7 1 10th 80th.
Senegal 7 2 21st 117th,Djibouti 7 0 47th 174th,Source World Bank PwC analysis. Nigeria Economic Outlook 6,Top 10 Themes for Nigeria in 2019. Theme 1 Diaspora remittances continue to sustain the economy. Theme 2 Economic growth sluggish characterised by slow recovery. Theme 3 Government s fiscal deficit expands above budget. Theme 4 Lackluster policy implementation impacts FDI FPI flows. Theme 5 Unemployment continues to trend upward, Theme 6 Oil prices still low coupled with production cuts. Theme 7 Inflation increases marginally driven mainly by base effects. Theme 8 Petrol prices may be re adjusted from N145 litre. Theme 9 Uncertainty around population and population growth rate. Theme 10 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. The Nigerian diaspora sent an, Nigeria Migrant remittance inflows 2005 2018 US million 20 estimated US 25 billion in.
remittances to the country in,2018 representing 6 1 of. 25 000 21 158 15 GDP,20 617 20 806,19 203 20 797,This figure translates to 83. 16 932 18 368 of the Federal Government,budget in 2018 and 11 times. the FDI flows in the same,Nigeria s migrant remittance. inflows was also 7 times,larger than the net official.
development assistance,foreign aid received in,0 10 2017 of US 3 359 billion. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018e. Migrant remittance inflows US million Growth rate,Source KNOMAD PwC analysis. Nigeria Economic Outlook Leading countries worldwide by value of migrant remittance outflows comprise the United States 8. Switzerland Germany Russia and China,Nigeria Economic Outlook. Top 10 themes for 2019, Economic growth still sluggish characterized by lackluster recovery. Real GDP growth expected,Real GDP growth to grow slightly to 2 5 y y.
3 0 on moderate improvements,in net exports and domestic. Depressed oil demand,0 8 coupled with production,1 0 supply cuts and price. fluctuations will impact the,0 5 economy s growth trajectory. 2015 2016 2017 2018 2019 The investment climate will. also be dampened in the,short term by uncertainty,usually associated with the. 1 5 pre and post election,1 6 cycles in the country.
Source NBS PwC Estimates,Nigeria Economic Outlook 9. Nigeria Economic Outlook,Top 10 themes for 2019,Government s fiscal deficit expands above budget. We expect revenues to,Fiscal deficit of GDP underperform budget by. c 27 as a shortfall in oil,supply offsets the impact of. 3 0 oil price growth scenarios,Consequently debt service.
to revenue expands higher,than the projected 31 in. the budget,Fiscal deficit widens by 79,1 0 to NGN4 55 trillion 3 of. GDP We expect that the,0 5 deficit will be funded by an. increased issuance in the,domestic bond market,2015 2016 2017 2018e 2019f. Source Budget Office IMF PwC Analysis,Nigeria Economic Outlook 10.
Nigeria Economic Outlook,Top 10 themes for 2019, Election uncertainty coupled with lackluster execution of policy reforms impacts FPI and FDI inflows. Foreign Investment 2015 Q3 2018 FDI flows US millions. USD million 5 000,Key Considerations,8 000 4 449,7 000 In 2018 we predicted a moderate increase in. 6 000 3 503 FPI and a slowdown in by HY 18 driven by. 3 500 uncertainty ahead of the elections We expect. 5 000 3 064 FPI growth in HY 19 to remain low and lower. 4 000 than pre 2018 level,2 500 2 200,2 000 We expect FDI flows to be dampened by. 1 500 lackluster implementation of policy reforms,500 Key risks to foreign investment include. Declining interest rate differentials as, 2014 2015 2016 2017 2018 advanced economies continue to tighten.
FPI FDI policy rates,Source UNCTAD PwC analysis,Political instability following the 2019. Source NBS PwC estimates elections,Unfavourable investment climate. PwC estimates that Nigeria would need an investment rate of at least 26 of GDP to achieve a growth of 7 Broad macroeconomic instability. Global FDI flows fell by 19 in 2018 However 2018 FDI flows to Africa increased by 6 from US 38 bn to US 40 bn South Africa grew by 446 Egypt by. 7 Nigeria on the other hand fell by 36 to US 2 2 bn and was overtaken by Ghana with US 3 3 bn. Nigeria Economic Outlook 11,Nigeria Economic Outlook. Top 10 themes for 2019, Uncertainty about the 2019 election outcomes policy implementation slowdown sell offs by foreign investors. in 2018 expected to slow growth in the stock market in HY 2019 amidst monetary tightening by members of the. frontier markets,NSE ASI Frontier Markets All Share Index.
Source CBN, Overall key drivers for the market from HY 2019 include commodity prices exchange rate movement and stability and inflation rate. Nigeria Economic Outlook 12,Nigeria Economic Outlook. Top 10 themes for 2019, Unemployment rate continues to trend upward even as the youth population expands rapidly with more than. half of the population under the age of 30, Unemployment rate and total number of unemployed Breakdown of unemployment by age group. 25 000 000 25 40,20 000 000 20,15 000 000 15,16 10 16 50.
10 000 000 10,5 000 000 5, 2010 2011 2012 2013 2014 2015 2016 2017 2018e 15 to 24 25 to 34 35 to 44 45 to 54 55 to 64. Source NBS PwC analysis,Nigeria Economic Outlook 13. Nigeria Economic Outlook,Top 10 themes for 2019,Oil prices still low coupled with production cuts. Nigeria crude oil production vs price quarterly,1 850 78 Fluctuating prices leave. Nigeria s oil driven economy,1 796 76 vulnerable to external shocks.
1 750 The oil production curve,72 continues to slope downward. and below the 2 mbpd,average target set by the,1 653 68 central government. OPEC has lowered Nigeria s,64 oil production level to 1 685. mbpd We expect this cut, Q1 2018 Q2 2018 Q3 2018 Q4 2018 coupled with fluctuations in oil. Oil production 000 bpd Oil price US per barrel price and potential supply. disruptions to impact the 2019, Rising oil prices will not be sustained in the long term as oil production increases globally and demand budget implementation.
Source World Bank,Nigeria Economic Outlook 14,Nigeria Economic Outlook. Top 10 themes for 2019, PMS Deregulation scenarios petrol prices may be re adjusted from NGN145 litre despite subsidy. How much could Nigerians pay for petrol Scenario A Scenario B. Oil price USD bbl,Exchange rate,Fuel subsidy Full Deregulation. 50 60 70 80, 285 144 164 184 205 NNPC continues to be the The exchange rate. sole importer of petrol assumption is marked to, 325 160 183 206 229 Intermittent scarcity in the NAFEX petrol prices.
365 176 202 228 254 supply of petrol persists increase by at least 57. 405 192 221 250 278 Impact on headline inflation Marketers resume. is marginal Estimate importation of petrol with, The grey area in the table are the possible retail prices of petrol per litre given remains at 13 y y in improved supply. changes in exchange rate and oil price 2019 in line with our. Note The estimates are based on PPPRA s previous petrol pricing template as at. projection Headline inflation,May 2016 margins are held constant. accelerates to 15 0 y y in,2019 210 bps above our,Current administered price. baseline estimate, Estimated retail price of PMS under a full deregulation scenario. Source PPPRA PwC estimates,Nigeria Economic Outlook 15.
Nigeria Economic Outlook Real GDP growth 2018 Nominal GDP 2017 5 Nominal GDP based on PPP 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

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