Nigeria Freight Transport Report 2016
BMI View: We forecast strong growth across all freight modes in Nigeria in 2016 and beyond. Increasingdemand for consumer goods by an expanding middle class and manufacturing sector will raise intermodalcontainer volumes. Population growth means growth in demand will continue, driving investment into thefreight sector, with substantial interest in developing the country's dilapidated rail network in addition toinvestment in the road and air freight infrastructure. We forecast a real GDP expansion of 3.8% in 2016while Nigeria continues to struggle with its readjustment to low oil prices. Some policies being pursued bythe president and the Central Bank will further constrain growth in the near term.
Economic growth in Nigeria will be weighed down by foreign exchange controls, an overvalued naira andpolicy uncertainty, all of which will serve to reduce investment in Africa's largest market. We forecast realGDP growth of 3.8% in 2016, following an estimated 3.3% in 2015. This is a marked slowdown on the6.2% averaged over the five years to 2014, reflecting the impact that the Q214 collapse in the oil price hashad on the Nigerian economy. Oil has in recent years accounted for over 70% of fiscal revenues and 90% ofexports, but with Brent crude set to average USD56 per barrel (/bbl) in 2016 and USD55/bbl in 2017,following a projected USD57/bbl in 2015, Nigeria must adapt its economic model from the days when oilaveraged well over USD100/bbl. Nigeria's current account balance will remain in deficit in 2016, as exportswill fail to recover from the 2014 oil price collapse. The deficit will narrow from 2015 however, as aninevitable naira devaluation will limit imports.
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