The Nigerian government has announced plans for a multibillion-dollar sell-off of state assets in the energy sector, in a push to boost cash flows and improve efficiency across the sector. Provisions in the 2018 budget, published in early November, set out proposals that allow for the sale of state equity in joint-venture (JV) oil assets, a move officials say will raise N710bn ($2bn). The additional…
Nigeria is the biggest economy in Africa with a GDP of $487bn in 2015, according to the World Bank. The country assumed the mantle of the continent’s largest economy in 2013, following a rebasing exercise. However, its large population means that Nigeria remains a comparatively poor country in per-capita terms, with a lower GDP per capita than several of its sub-Saharan neighbours. Following a r
Given the size of its population and economy, and its high diplomatic profile in the African arena, Nigeria has a widely acknowledged role as continental heavyweight. Through successive administrations, and evidenced by the large military and financial contributions it has made to regional economic and peacekeeping efforts, Abuja has long assumed a lead role in everything from encouraging regional…
With a variety of economic and diplomatic ties linking it with superpowers both old and new, Nigeria has long been a prominent player in both the continental and global arena. While simultaneously pursuing a leadership role on a variety of cooperative initiatives with its West African neighbours, the country’s diplomatic efforts internationally have also largely succeeded in garnering support from…
With hydrocarbons accounting for 90% of Nigeria’s foreign exchange, sustained low oil prices in 2014 and 2015 reduced the availability of dollars and other major foreign currencies. This reverberated throughout the economy, given the need for dollars to buy imports for key staples ranging from rice to diesel fuels. As a result, Nigeria teetered for months on the edge of a currency crisis,…
Nigeria has seen notable success in recent months on global debt markets. In February 2017 the government issued a 15-year, $1bn dollar-denominated eurobond at a yield of 7.9%, which was eight times oversubscribed. The following month it issued an additional $500m eurobond at a yield of 7.5%, testament to the continued appetite for debt in Africa’s largest economy. The February and March…
In response to Nigeria’s 2016 recession, the government launched the Economic Recovery and Growth Plan (ERGP) in March 2017. The ERGP sets out broad targets ranging from macroeconomic stability to economic diversification and improving governance. It identifies five priority areas: stabilising the macroeconomic environment; achieving agricultural and food security; improving transportation…
Financial intermediation – the process of matching savers with borrowers – is a primary function of the banking sector. Intermediation channels excess funds towards productive uses, spreading the risk across a bank’s entire depositor base so no single saver bears the losses in the event of a loan default. However, in Nigeria intermediation is slowing, with lending activity being affected…
While Nigeria’s economy remains largely cash-based, there has been an increased focus since 2012 on reducing inefficient cash transactions. According to the Central Bank of Nigeria (CBN), an excess of currency in circulation has hindered plans to stabilise prices. In addition, the costs associated with currency sorting, cash management, transport and frequent printing have also kept bank…
A primary issue affecting Nigeria’s economy in recent years has been the decline in foreign reserves, particularly the shortage of US dollars, which have been hit by low oil prices. This slump in the price of oil has caused major complications for the Nigerian economy as a whole, particularly given the increasingly high demand for imports ranging from industrial equipment to food staples. A…
