Nigeria: Economic Outlook - Top 10 Themes For 2018 - PwC
E Window (NGN/USD)Source: CBN, PwC estimatesNigeria: Economic OutlookPwC*External reserves data is as at January 30 201810February 2018
Oil priceEconomic Growth Inflation Rate Interest Rate Fiscal FinancesExchange Rate InvestmentPetrol Supply: Scenarios 2019 Elections Three Emerging Scenarios Nigeria's Risk MatrixStable investment climate supports increase in FPI and FDIForeign Investment, 2014 - Q3'2017(USD'million)Key Considerations4,000123,0002,0001,0002014 Qrt. 2015 Qrt. 2016 Qrt.Avg.Avg.Avg.Foreign Portfolio InvestmentSource: CBN, NBS, PwC estimatesNigeria: Economic OutlookPwCQ1'17Q2'17Q3'17Foreign Direct Investment3FPI increases moderately, due to strong foreigninvestor interest. However, we expect aslowdown in FPI in H2’18, driven by uncertaintyahead of the electionsFDI advances slightly, driven by a favourableinvestment climate and broad macroeconomicstabilityKey risks to foreign investment include : Declining interest rate differentials asadvanced economies continue to tighten policyrates Political instability ahead of the 2019 electionsdrives uncertainty around government policies11February 2018
Oil priceEconomic Growth Inflation Rate Interest Rate Fiscal FinancesExchange Rate InvestmentPetrol Supply: Scenarios 2019 Elections Three Emerging Scenarios Nigeria's Risk MatrixPMS Deregulation scenarios: petrol prices will likely be maintained atNGN145/litreHow much could Nigerians pay for petrol?Exchange rate(NGN/USD)Scenario AScenario BOil price (USD/bbl.)Fuel 6202228254405192221250278 The grey area in the table are the possible retail prices of petrol per litre, given changesin exchange rate and oil price Note: The estimates are based on PPPRA’s previous petrol pricing template as at May2016, margins are held constantCurrent administered priceEstimated retail price of PMS under a full deregulationscenario NNPC continues to be thesole importer of petrol.Intermittent scarcity inthe supply of petrolpersists. Impact on headlineinflation is marginal.Estimate remains around12.2% y/y in 2018, in linewith our projectionFull Deregulation The exchange rateassumption is marked toNAFEX; petrol pricesincrease by at least 57% Marketers resumeimportation of petrol,with improved supply Headline inflationaccelerates to 15.0% y/yin 2018, 180bps aboveour baseline estimateSource: PPPRA, PwC estimatesNigeria: Economic OutlookPwC12February 2018
Oil priceEconomic Growth Inflation Rate Interest Rate Fiscal FinancesExchange Rate InvestmentPetrol Supply: Scenarios 2019 Elections Three Emerging Scenarios Nigeria's Risk MatrixNew parties, defections and political truces; the pre-election season getsunderwayWhat we know *No ofParties:68Presidential elections:16 February 2019Unwritten ruleThe zoning principle Emerging three horse race?All ProgressivesCongressPartiesPeoplesDemocratic PartyA new coalition?New alliances are being formed by prominentpoliticians and old guards to upset thedominance of the APC and PDPNBS, PwC2018estimates*Source:As at JanuaryNigeria: Economic OutlookPwCZoning implies the sharing orrotation of public office based onregion, ethnicity or religionaimed at reducing domination ormarginalization of a group(s) ofpeopleWhat does historical data tell us? Reviewing election results from thepast 2 presidential election cycles,we observed a shift in the votingpattern of voters in the South-Westand the North-Central states in the2o15 elections Which states will swing in 2019?2011 Presidential ElectionCPCMuhammadu BuhariNigerPDPGoodluck JonathanACNNuhu Ribadu2015 Presidential ElectionNigerAPCMuhammadu BuhariPDPGoodluck JonathanThe question is, which states willswing in 2019?PwC AnalysisNote: CPC and ACN merged into APC in 201313February 2018
Oil priceEconomic Growth Inflation Rate Interest Rate Fiscal FinancesExchange Rate InvestmentPetrol Supply: Scenarios 2019 Elections Three Emerging Scenarios Nigeria's Risk MatrixA stable political environment key to sustaining Nigeria’s economic recoveryReal GDP Growth8%6%4%Scenario 12%Scenario 20%Scenario 3-2%201720182019202020212022Source: NBS, PwC estimatesOil price(USD/bbl.)OilProduction (mbpd)Structural reformsScenario 1: Accelerated Policy reforms602.2Fast-paced implementation of structural reforms, particularlythose related to the business environmentScenario 2: Weak policy implementation602.2Sluggish implementation of structural reforms, with the drivefor import substitution progressing at a slow paceScenario 3: Heightened political risk601.7Political tension accelerates in the wake of 2019 generalelections, negatively impacting policy implementationOur AssumptionsNigeria: Economic OutlookPwC14February 2018
Oil priceEconomic Growth Inflation Rate Interest Rate Fiscal FinancesExchange Rate InvestmentPetrol Supply: Scenarios 2019 Elections Three Emerging Scenarios Nigeria's Risk MatrixLower oil prices, disruptions to crude oil production, and political instabilityare the major near term risksRisksDescriptionLower oil prices Failure of OPEC members to comply with production cutsagreement and increasing shale productionSlowdown in keyeconomies Slowdown in economies with strong trade relations with Nigeria,particularly China, the UK , the US and IndiaMonetary policynormalization Ongoing monetary policy normalization in the US could lead to areversal of foreign capital and restrict further flows Pre-election and 2018 budget spendingHigh inflation Adjustment of petrol prices and power tariffOil rityLowNigeria: Economic OutlookPwCPotentialimpactLikelihood ofoccurrenceTime horizonShort to mediumtermShort to MediumtermShort to Mediumterm Attacks on oil and gas facilities by militant groups in the Niger DeltaregionShort to Medium Pre-election uncertainties could elevate political tensions, andleadership succession could hamper policy continuityMedium term Continuous insurgency in the Northern regionShort to MediumtermMediumHigh15February 2018
XNBSNGNNNPCOMOPDPPPPRAUSDNigeria: Economic OutlookPwCAll Progressives CongressAction Congress of NigeriaBarrel of Crude OilCentral Bank of NigeriaCongress for Progressive ChangeForeign Direct InvestmentForeign Portfolio InvestmentGross Domestic ProductInvestors and Exporters WindowMonetary Policy CommitteeMonetary Policy RateNigerian Autonomous Foreign Exchange Rate FixingNational Bureau of StatisticsNigerian NairaNigerian National Petroleum CorporationOpen Market OperationPeople’s Democratic PartyPetroleum Products Pricing Regulatory AgencyUnited States Dollar16February 2018
ContactsAndrew S. NevinPartner & Chief EconomistPwC Nigeriaandrew.x.nevin@pwc.comAdedayo AkinbiyiSenior Manager & EconomistPwC Nigeriaadedayo.akinbiyi@pwc.comRazaq FataiJunior EconomistPwC NigeriaRazaq.fatai@pwc.comAdedayo BakareJunior EconomistPwC NigeriaDayo.bakare@pwc.comPwCFebruary 2018
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Impact on headline inflation is marginal. Estimate remains around 12.2% y/y in 2018, in line with our projection Scenario A Full Deregulation The exchange rate assumption is marked to NAFEX; petrol prices increase by at least 57% Marketers resume importation of petrol, with improved supply
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In 2017, Nigeria introduced its first Building Energy Efficiency Code, which sets minimum standards for energy efficiency for new buildings in Nigeria. 2030 NDC TARGET The country's 2030 NDC target is 442.5 MtCO 2 e by 2030. There is no Climate Action Tracker analysis for Nigeria. All figures exclude land use emissions. NIGERIA Nigeria's GHG
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Growth in Nigeria Kenneth Ogbeide ENORUWA1, 3Moyotole Daniel EZUEM2, Onyemaechi Christopher NWANI 1Department of Banking & Finance, University of Nigeria, Nsukka, Nigeria 2,3Department of Banking and Finance, Federal University Wukari, Taraba State, Nigeria Abstract:-This work examines the impact of the capital market
from the sub-national FREL that Nigeria submitted to UNFCCC in 2018. 3.1 Geographical location, relief, climate, soils and Vegetation of Nigeria The Federal Republic of Nigeria (henceforth referred to as Nigeria), is located on the West coast of Africa between latitudes 3 15' to 13 30' N and longitudes 2 59' to 15 00' E (Figure 1 .
