News / Economy

IMF: Nigeria's Economic Growth to Quicken, Inflation to Ease This Year

A staff member takes stock of goods at the warehouse of Konga online shopping company in Ilupeju district in Nigeria's commercial capital Lagos, Sept. 13, 2013.
A staff member takes stock of goods at the warehouse of Konga online shopping company in Ilupeju district in Nigeria's commercial capital Lagos, Sept. 13, 2013.
Reuters
Economic growth in Nigeria will accelerate this year, driven by sectors outside its dominant energy industry, while inflation will continue its downward path, the International Monetary Fund said on Friday.
    
Africa's second-largest economy is set to grow 7.3 percent this year, up from 6.4 percent in 2013, the IMF said, a more optimistic outlook than Nigerian Finance Minister Ngozi Okonjo-Iweala's projection for 6.75 percent growth.
    
Inflation will end the year at 7 percent, down from 7.9 percent at the end of 2013, continuing a two-year downward trend supported by tight monetary policy, the IMF said.
    
Africa's most populous nation plans this year to recalculate its gross domestic product, which could push it above South Africa as the continent's biggest economy, although the rebasing has missed several deadlines already.
    
The IMF's forecast does not account for the rebasing.
    
"Economic growth is expected to improve further in 2014, driven by agriculture, trade, and services," the IMF said in a report following consultations with Nigerian officials.
    
"Inflation should continue to decline, with lower food prices from higher rice and wheat production and supported by a tight monetary policy and a budget execution that maintains  medium-term consolidation objectives," it said.
    
The IMF said there were risks to its projections, including the uncertain pace of the global recovery, lower oil prices and production, slow implementation of reforms and the continuation of a bloody Islamist insurgency in the north.
    
It also cautioned against draining fiscal buffers.
    
Savings dwindling
    
Nigeria's excess crude account, where Africa's biggest oil exporter saves money from excess oil revenues not allocated for in the government's budget, contained $2.28 billion at the end of last year, down from around $9 billion a year earlier.
    
Forex reserves have also fallen, to a 19-month low of $40 billion, and the naira, which had been stable, is under pressure from the emerging market asset sell-off and since President Goodluck Jonathan unexpectedly suspended respected central bank governor Lamido Sanusi last month, hitting investor confidence.
    
Reserves remain at a relatively comfortable 5.6 months of imports, the IMF noted.
    
Nigeria will hold presidential and parliamentary elections next February and investors are concerned about a possible spike in government spending ahead of the vote and potential leakages in oil revenues, in a sector which has suffered a number of corruption scandals in recent months.
    
"Policies should focus on rebuilding external and fiscal buffers, avoiding spending pressures from the political cycle,  strengthening the transparency and governance of the oil sector," the IMF said in its report.
    
Nigeria estimated oil output would average 2.39 million barrels per day (bpd) this year, which oil industry experts think is overly optimistic and is likely to lead to an underfunded budget, as happened last year.
    
Large scale oil theft, which can reach 400,000 bpd, and outages caused by aging pipelines and other infrastructure deficiencies are keeping output well below the sector's 2.7 million bpd capacity.
    
Despite robust growth and an attractive investment outlook, Nigeria still suffers from gaping inequality, the IMF noted. Thousands of new millionaires are created each year but most of the country's 170 million people live on less than $1 a day and unemployment is stuck at around 25 percent.
    
"Despite significant job creation, unemployment and poverty are high and social indicators lag those of peers," the IMF said.
    
"Continued weaknesses in labor markets, access to electricity, cost of doing business, and small and medium  enterprises' access to finance have prevented a transition to a more robust and inclusive growth path," it said.

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Srebrenica Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs countermeasure at UN More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Family of American Marine Calls for Release From Iranian Prisoni
X
Heather Murdock
July 01, 2015 8:59 PM
As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs

World Currencies

EUR
USD
0.9009
JPY
USD
123.09
GBP
USD
0.6387
CAD
USD
1.2524
INR
USD
63.605

Rates may not be current.