Nigeria Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Nigeria Country Risk Report
Product Price
$1,195.00

Core Views

  • Growth in Nigeria, already suffering from the oil price collapse, will be further impacted by the unorthodox monetary policy being enacted in the country, which - contrary to its professed aims - is stifling existing domestic non-oil production. Looser monetary and fiscal policy will not be sufficient to compensate.

  • President Muhammadu Buhari remains determined to plough his own furrow, pursuing his own politically determined economic path in the face of criticism from businesses, investors and analysts around the world. He is single-mindedly attempting to reshape the Nigerian economy, clean up its ministries and business practices, and eliminate graft. Given the massive reliance on the oil sector, and the devastating effect fiscal leakage has had on Nigeria's development, these are worthwhile pursuits. However, the president - and Nigeria - must be prepared for hardship in their quest in the near term and we contend that too dogmatic a pursuit of these ideals will endanger the country's ability to attract foreign investment.

  • The ramp-up in spending that the Nigerian government has proposed will outpace any growth in revenues, and the fiscal deficit will widen as a result. This will be financed by borrowing on international markets and from multilateral bodies - which will likely come with conditions attached.

  • Nigeria's current account will remain in deficit in 2016 and over the course of our forecast period, thanks to the oil price collapse and a reliance on imported goods. This will be financed through borrowing from multilateral institutions and the international debt market.

  • In light of the recent monetary policy meeting in Nigeria we maintain our forecast that there will be a 100bps cut to the policy rate in 2016. Growth stimulation remains the primary concern, and with a naira devaluation looking increasingly uncertain, this will become even more important.

Key Risks

  • While we believe that security risks will eventually be contained, if the situation significantly deteriorates, this would potentially affect investment, exports, and growth.

  • Power sector reforms are crucial for long-term productivity gains. If these are slowed or stalled, this would lead to lower long-term trend growth than we currently expect.

Macroeconomic Forecasts (Nigeria 2014-2017)
Indicator 2014e 2015e 2016f 2017f
e/f = BMI estimate/forecast. Source: National Sources
Nominal GDP, USDbn 545.8 441.9 457.8 479.3
Real GDP growth, % y-o-y 6.3 3.3 3.6 4.5
Consumer price inflation, % y-o-y, eop 8.0 9.6 9.0 8.5
Exchange rate NGN/USD, eop 183.48 199.30 230.00 240.00
Budget balance, % of GDP -1.2 -2.6 -3.2 -2.8
Current account balance, % of GDP 0.2 -2.0 -2.5 -1.9
Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Reform Agenda Set For A Rocky Road
8
Long-Term Political Outlook
9
Inequality, Corruption And Militancy Pose Long-Term Challenges
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Growth Weighted Down By The Limits Of An Oil-Driven Model
14
table : Economic Ac tivity
14
Balance Of Payments
15
Falling Imports Insufficient To Prevent Current Account Deficit
15
table: Current Account
15
Fiscal Policy
17
Growing Deficit To Lead To Debt And Devaluation
17
table : Fisc al Polic y
17
Monetary Policy
19
Naira Weakness To Spur 50bps Rate Hike
19
table : Mone tary Polic y
20
Chapter 3: 10-Year Forecast
21
The Nigerian Economy To 2024
21
Power Sector Key For Long-Term Productivity
21
table : Long -Term Macr oec onomic Forec asts
21
Chapter 4: Operational Risk
27
SWOT Analysis
27
Operational Risk Index
27
Operational Risk
28
table: Operational Risk
28
Market Size And Utilities
29
table : Sub -Saharan Afric a - Market Size And Utili ties Avail abili ty
30
International Security Risk
34
table : Sub -Saharan Afric a Inters tate Securi ty Ris ks
35
Chapter 5: Key Sectors
39
Pharmaceuticals & Healthcare
39
table : Pharm aceu tic al Sales , His toric al Data And Forec asts
40
table: Healthcare Expenditure Trends, Historical Data And Forecasts
41
Telecommunications
43
table : Telecoms Sec tor - Historic al Data & Forecasts
44
Other Key Sectors
47
table : Oil and Gas Sector Key Indicators
47
table : Infrastructure Sec tor Key Indicators
47
table : Food and Drink Sector Key Indicators
48
table : Freight Key Indicators
48
Chapter 6: BMI Global Macro Outlook
49
Global Outlook
49
Assessing The Aftermath Of Three Key Events
49
Table : Global Assumptions
49
Table : Developed States , Real GDP Growt, %
50
Table : BMI VERSUS BLOO MBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
50
Table : Emerging Markets, Real GDP Growth, %
51

Assess your risk exposure in Nigeria with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Nigeria with confidence.

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