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Published by: Business Monitor International
Published: Oct. 30, 2009 - 60 Pages
Table of Contents
- Executive Summary
- Reforming Banks, But Not Militants
- Chapter 1: Political Outlook
- SWOT Analysis
- BMI Political Risk Ratings
- Domestic Politics
- Banking Reform: Taking On The Elite
- While the Central Bank of Nigeria has managed to defuse fears of a systemic banking crisis, its audit includes measures
- that are likely to impinge on some of the country’s most powerful vested interests.
- Table: Political Overview
- Domestic Politics
- End Of Amnesty: Peace In Our Time?
- Despite the apparent success of the government’s 60-day amnesty for militants in the Niger Delta, we do not think it will
- be long before violence resumes since the underlying causes of the conflict have not been addressed.
- Chapter 2: Economic Outlook
- SWOT Analysis
- BMI Economic Risk Ratings
- Economic Activity
- Growth Revised Up To 4.0% in 2009, 5.1% In 2010
- We have revised up our 2009 and 2010 real GDP growth forecasts to 4.0% and 5.1%, from 3.1% and 3.5% previously.
- TABLE: ECONOMIC ACTIVITY
- Exchange Rate Policy
- Naira: The Panic Is Over
- Following a period of considerable exchange rate volatility in Q309, we expect the naira to remain relatively stable
- over the short term.
- Fiscal Policy
- Government Fiscal Targets Likely To Understate Deficit
- Despite a characteristically low estimate for the benchmark oil price and growth, we believe that Nigeria’s 2010-2012
- budget framework is likely to be understating the size of the fiscal deficit over the coming three years.
- TABLE: FISCAL POLICY
- SSA Regional Economic Outlook
- Assessing The Real Effects Of The Growth Trajectory
- An examination of real GDP per capita - as opposed to nominal GDP per capita - reveals interesting trends in real wealth
- and living standards in sub-Saharan Africa.
- Chapter 3: 10-Year Forecast
- The Nigerian Economy To 2019
- Infrastructure Investment Is Key
- We are forecasting average annual real GDP growth of 6.4% over the next 10 years.
- TABLE: Lon g-Term Macroeconomic Forecasts
- Chapter 4: Special Report
- The World’s Fiscal Conundrum
- Bleeding Red Ink Across The Globe
- Table: WORLD GOVERNMENT EXPENDITURE INDICATORS
- Table: WORLD GOVERNMENT REVENUE INDICATORS
- Table: WORLD FISCAL BALANCE INDICATORS
- Chapter 5: Business Environment
- SWOT Analysis
- BMI Business Environment Risk Ratings
- Business Environment Outlook
- TABLE: BMI BUSINESS AND OPERATIONAL RISK RATINGS
- Institutions
- TABLE: BMI LEGAL FRAMEWORK RATINGS
- Infrastructure
- Market Orientation
- table: MIDDLE EAST & AFRICA, ANNUAL FDI INFLOWS
- table: TOP EXPORT DESTINATIONS, US$MN
- Operational Risk
- Chapter 6: Key Sectors
- Food & Drink
- Executive Summary
- Devoid of a dominant retailer, Nigeria’s fledgling MGR industry remains an attractive market. 49
- Table: Grocery Retail Sales Value by Format
- Agribusiness
- Executive Summary
- Cocoa will continue to be a very important cash crop for the Nigerian economy.
- Table: Cocoa Production, Consumption & Trade
- Chapter 7: BMI Global Assumptions
- Global Assumptions
- TABLE: GLOBAL ASSUMPTIONS
- TABLE: GLOBAL & REGIONAL REAL GDP GROWTH
- Table: COMMODITY PRICES
AbstractWhile the Central Bank of Nigeria has managed to defuse fears of a systemic banking crisis, itshighly-publicised campaign to collect the banks’ outstanding debts is likely to impinge on the interestsof some of the country’s most powerful figures. As before, we fear that this process couldcompromise its wider reforms aimed at improving transparency and reporting standards, whilefailing to achieve its goal of recovering the banks’ outstanding debt. All told, nine of the country’s24 banks were determined to be in a ‘grave’ situation, necessitating the dismissal of their CEOsand the injection of NGN620bn of Tier 2 capital.
Meanwhile on the economic front, the combination of rising agricultural production, a stable oil price,and returning confidence to the banking sector have convinced us to revise up our 2009 and 2010real GDP growth forecasts to 4.0% and 5.1%, from 3.1% and 3.5% previously. Nevertheless weacknowledge that the latest monetary indicators have been giving mixed signals: banking sectorcredit to the economy has been expanding, but both M1 and M2 are still in decline.
O n the political front, militancy in the Niger Delta will continue to threaten stability, even if the governmenthas been touting the success of its amnesty programme. To be sure, several prominentmilitant leaders took up the amnesty offer and participated in elaborate disarmament ceremonies.
However, this was followed in short order by a promise from MEND to replace the ‘rented’ commanders,with a view to scaling up its campaign against the government. In our view, there is littlehope for a durable peace settlement until the underlying causes of the conflict - poverty, corruption,and ready access to oil that can be stolen - are addressed.
T he major challenge from a business environment perspective is reaching an agreement withinternational oil companies on the renewal of drilling leases. At the time of writing, officials fromthe oil groups in question were preparing to meet with their Nigerian counterparts, who have beendemanding a greater share in the profits of joint oil and gas ventures. The Nigerian authoritieswere also considering an offer from the Chinese National Overseas Oil Company to buy minoritystakes in 23 oil blocks - a direct challenge to oil groups currently operating in Nigeria
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