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

    Hope Remains for Rio Olympic Games, Despite Woes

    Facing a host of problems, Rio prepares for holding the games but experts say some risks, like Zika, may not be as grave as initially thought

    IS Use of Social Media to Recruit, Radicalize Still a Top Threat to US

    Despite military gains against IS in Iraq and Syria, their internet propaganda still commands an audience; US officials see 'the most complex challenge that the federal government and industry face'

    ‘Time Is Now’ to Save Africa’s Animals From Poachers, Activist Says

    During Zimbabwe visit, African Wildlife Foundation President Kaddu Sebunya says poaching hurts Africa as slave trade once did

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Ivorian Chocolate Makers Promote Locally-made Chocolatei
    X
    July 29, 2016 4:02 PM
    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Ivorian Chocolate Makers Promote Locally-made Chocolate

    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Tesla Opens Battery-Producing Gigafactory

    Two years after starting to produce electric cars, U.S. car maker Tesla Motors has opened the first part of its huge battery manufacturing plant, which will eventually cover more than a square kilometer. Situated close to Reno, Nevada, the so-called Gigafactory will eventually produce more lithium-ion batteries than were made worldwide in 2013. VOA's George Putic reports.
    Video

    Video Polio-affected Afghan Student Fulfilling Her Dreams in America

    Afghanistan is one of only two countries in the world where children still get infected by polio. The other is Pakistan. Mahbooba Akhtarzada who is from Afghanistan, was disabled by polio, but has managed to overcome the obstacles caused by this crippling disease. VOA's Zheela Nasari caught up with Akhtarzada and brings us this report narrated by Bronwyn Benito.
    Video

    Video Hillary Clinton Promises to Build a 'Better Tomorrow'

    Democratic presidential candidate Hillary Clinton urged voters Thursday not to give in to the politics of fear. She vowed to unite the country and move it forward if elected in November. Clinton formally accepted the Democratic Party's nomination at its national convention in Philadelphia. VOA national correspondent Jim Malone has more.
    Video

    Video Trump Tones Down Praise for Russia

    Republican presidential candidate Donald Trump is toning down his compliments for Russia and Vladimir Putin as such rhetoric got him in trouble recently. After calling on Russia to find 30.000 missing emails from rival Hillary Clinton, Trump told reporters he doesn't know Putin and never called him a great leader, just one who's better than President Barack Obama. Putin has welcomed Trump's overtures, but, as Zlatica Hoke reports, ordinary Russians say they are not putting much faith in Trump.
    Video

    Video Uganda Unveils its First Solar-powered Bus

    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Silicon Valley: More Than A Place, It's a Culture

    Silicon Valley is a technology powerhouse and a place that companies such as Google, Facebook and Apple call home. It is a region in northern California that stretches from San Francisco to San Jose. But, more than that, it's known for its startup culture. VOA's Elizabeth Lee went inside one company to find out what it's like to work in a startup.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8998
    JPY
    USD
    103.32
    GBP
    USD
    0.7594
    CAD
    USD
    1.3176
    INR
    USD
    66.954

    Rates may not be current.