This Quick review would be based on findings gather from several published article for the first Half of the year. In various aspect of the country's economy(Nigeria) business today would give a complete beat down of all you for the first Half of the year.
1. Crude oil the country's Number 1 asset for Income.
With Nigerian President Muhammadu Buhari in absentia suffering from an undisclosed illness, the country's National Bureau of Statistics reported this week that the economy contracted 1.5 percent last year for the first time in nearly 25 years. Although Vice President Yemi Osinbajo is handling day-to-day management of the country, analysts say Nigeria's mounting woes require steady leadership.
Like most OPEC member states, the former emerging market standout has found itself on the wrong side of oil prices that remain far too low to bolster an economy heavily reliant upon crude production.
The troubles of Africa's largest economy have been exacerbated by a debilitating currency shortage. The International Monetary Fund forecasts Nigeria will only see "modest growth" of less than 1 percent this year, and inflation is running in the double digits. It all suggests relief for the beleaguered country appears far off.
"Shortage of foreign exchange is very severe," explained Win Thin, global head of emerging market currency research at Brown Brothers Harriman. "Foreign investors today face very long delays in repatriating funds out of Nigeria."
The shortages were first caused by lower oil prices, but policymakers ultimately made the situation worse by pegging the Nigerian naira [its official currency] at a rate analysts say was overvalued. "As such, markets are not clearing and there are shortages of FX".
2. The Dated Source of this Melt down
Nigeria's economy came to be defined by recession and devaluation in 2016, pressing home the point that Nigeria's growth and exchange rate stability in the decade-and-half from 2000 to 2014 had been entirely dependent on favourable global commodity cycles.
Weak commodity prices brought Nigeria's growth to very abrupt end and inflicted heavy bouts of devaluation to the Naira. It should be noted that Nigeria's growth would have been more resilient if the country had a better rail transport and energy infrastructure that would have underpinned higher value addition in industry.
Both the recession and devaluation resulted from foreign exchange shorted inflicted by the collapse in Nigeria's annual exports receipts from about $100 billion up till 2014, to less than $50 billion since 2015 because of the fall in oil price.
Finally,
For the Second Half of the year in Nigeria, to recover would be premised by luck, cyclical upturn, rather hard work, countercyclical policies or economy or economic reforms. Assuring the sustenance of the recovery will require more than luck. Policies would be required to open Nigeria up for investment inflows that will rebuild rail transportation and energy infrastructure now, and create much needed external reserve buffers that would help Nigeria withstand future cyclical swings.
" Business Today with knowledge wealth and power".
1. Crude oil the country's Number 1 asset for Income.
With Nigerian President Muhammadu Buhari in absentia suffering from an undisclosed illness, the country's National Bureau of Statistics reported this week that the economy contracted 1.5 percent last year for the first time in nearly 25 years. Although Vice President Yemi Osinbajo is handling day-to-day management of the country, analysts say Nigeria's mounting woes require steady leadership.
Like most OPEC member states, the former emerging market standout has found itself on the wrong side of oil prices that remain far too low to bolster an economy heavily reliant upon crude production.
The troubles of Africa's largest economy have been exacerbated by a debilitating currency shortage. The International Monetary Fund forecasts Nigeria will only see "modest growth" of less than 1 percent this year, and inflation is running in the double digits. It all suggests relief for the beleaguered country appears far off.
"Shortage of foreign exchange is very severe," explained Win Thin, global head of emerging market currency research at Brown Brothers Harriman. "Foreign investors today face very long delays in repatriating funds out of Nigeria."
The shortages were first caused by lower oil prices, but policymakers ultimately made the situation worse by pegging the Nigerian naira [its official currency] at a rate analysts say was overvalued. "As such, markets are not clearing and there are shortages of FX".
2. The Dated Source of this Melt down
Nigeria's economy came to be defined by recession and devaluation in 2016, pressing home the point that Nigeria's growth and exchange rate stability in the decade-and-half from 2000 to 2014 had been entirely dependent on favourable global commodity cycles.
Weak commodity prices brought Nigeria's growth to very abrupt end and inflicted heavy bouts of devaluation to the Naira. It should be noted that Nigeria's growth would have been more resilient if the country had a better rail transport and energy infrastructure that would have underpinned higher value addition in industry.
Both the recession and devaluation resulted from foreign exchange shorted inflicted by the collapse in Nigeria's annual exports receipts from about $100 billion up till 2014, to less than $50 billion since 2015 because of the fall in oil price.
Finally,
For the Second Half of the year in Nigeria, to recover would be premised by luck, cyclical upturn, rather hard work, countercyclical policies or economy or economic reforms. Assuring the sustenance of the recovery will require more than luck. Policies would be required to open Nigeria up for investment inflows that will rebuild rail transportation and energy infrastructure now, and create much needed external reserve buffers that would help Nigeria withstand future cyclical swings.
" Business Today with knowledge wealth and power".
Nigeria’s recovery in
2017 is currently premised on luck, cyclical upturn, rather than hard
work, countercyclical policies or economic reforms. Assuring the
sustenance of the recovery will require more than luck. Policies would
be required to open Nigeria up for investment inflows that will rebuild
rail transportation and energy infrastructure now, and create much
needed external reserve buffers that would help Nigeria withstand future
cyclical swings. Read more at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
Nigeria’s economy came
to be defined by recession and devaluation in 2016, pressing home the
point that Nigeria’s growth and exchange rate stability in the
decade-and-half from 2000 to 2014 had been entirely dependent on
favourable global commodity cycles. Weak commodity prices brought
Nigeria’s growth to a very abrupt end and inflicted heavy bouts of
devaluation to the naira. It should be noted that Nigeria’s growth would
have been more resilient if the country had a better rail transport and
energy infrastructure that would have underpinned higher value addition
in industry. Both the recession and devaluation resulted from the
foreign exchange shortage inflicted by the collapse in Nigeria’s annual
exports receipts from about US$100 billion up till 2014, to less than
US$50 billion since 2015, because of the fall in oil price. Read more
at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
Nigeria’s economy came
to be defined by recession and devaluation in 2016, pressing home the
point that Nigeria’s growth and exchange rate stability in the
decade-and-half from 2000 to 2014 had been entirely dependent on
favourable global commodity cycles. Weak commodity prices brought
Nigeria’s growth to a very abrupt end and inflicted heavy bouts of
devaluation to the naira. It should be noted that Nigeria’s growth would
have been more resilient if the country had a better rail transport and
energy infrastructure that would have underpinned higher value addition
in industry. Both the recession and devaluation resulted from the
foreign exchange shortage inflicted by the collapse in Nigeria’s annual
exports receipts from about US$100 billion up till 2014, to less than
US$50 billion since 2015, because of the fall in oil price Read more at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
Nigeria’s economy came
to be defined by recession and devaluation in 2016, pressing home the
point that Nigeria’s growth and exchange rate stability in the
decade-and-half from 2000 to 2014 had been entirely dependent on
favourable global commodity cycles. Weak commodity prices brought
Nigeria’s growth to a very abrupt end and inflicted heavy bouts of
devaluation to the naira. It should be noted that Nigeria’s growth would
have been more resilient if the country had a better rail transport and
energy infrastructure that would have underpinned higher value addition
in industry. Both the recession and devaluation resulted from the
foreign exchange shortage inflicted by the collapse in Nigeria’s annual
exports receipts from about US$100 billion up till 2014, to less than
US$50 billion since 2015, because of the fall in oil price. Read more
at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
Nigeria’s economy came
to be defined by recession and devaluation in 2016, pressing home the
point that Nigeria’s growth and exchange rate stability in the
decade-and-half from 2000 to 2014 had been entirely dependent on
favourable global commodity cycles. Weak commodity prices brought
Nigeria’s growth to a very abrupt end and inflicted heavy bouts of
devaluation to the naira. It should be noted that Nigeria’s growth would
have been more resilient if the country had a better rail transport and
energy infrastructure that would have underpinned higher value addition
in industry. Both the recession and devaluation resulted from the
foreign exchange shortage inflicted by the collapse in Nigeria’s annual
exports receipts from about US$100 billion up till 2014, to less than
US$50 billion since 2015, because of the fall in oil price. Read more
at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
Nigeria’s economy came
to be defined by recession and devaluation in 2016, pressing home the
point that Nigeria’s growth and exchange rate stability in the
decade-and-half from 2000 to 2014 had been entirely dependent on
favourable global commodity cycles. Weak commodity prices brought
Nigeria’s growth to a very abrupt end and inflicted heavy bouts of
devaluation to the naira. It should be noted that Nigeria’s growth would
have been more resilient if the country had a better rail transport and
energy infrastructure that would have underpinned higher value addition
in industry. Both the recession and devaluation resulted from the
foreign exchange shortage inflicted by the collapse in Nigeria’s annual
exports receipts from about US$100 billion up till 2014, to less than
US$50 billion since 2015, because of the fall in oil price. Nigeria’s
dependence on export receipts as the sole source of external financing
made the country more vulnerable than countries who receive large
diaspora remittances and large foreign direct investment (FDI) inflows,
in addition to export revenue. A major learning point for Nigeria is
that larger capital inflows would have made the oil price fall less
hurtful. Global trade flows are slowing because of the global
commodities supply glut, but global financial flows are growing because
of the global liquidity glut created by leading central banks. Past
Nigerian governments and the central Bank of Nigeria have been
historically transfixed on external trade flows, while being largely
oblivious of external capital flows. Read more at:
https://economicconfidential.com/features/nigerias-economic-outlook-2017/
0 comments:
Post a Comment