2013-01-01 14:07:53 - Nigeria Business Forecast Report Q1 2013 - a new country guide report on companiesandmarkets.com
Although the outlook has dimmed somewhat, we believe that the non-oil sectors of the economy will still drive strong growth in the months and years ahead, while a wide current account surplus and commitment to prudent macroeconomic governance will bolster Nigeria´s investment profile.
From a political standpoint, the government is making headway in addressing the threat of Boko Haram. However, criminality in the southern states is on the rise.
Major Forecast Changes
We have downgraded our growth forecasts for Nigeria´s economy, due in large part to the slowdown in the non-oil sector at the beginning of the year. We now expect growth of 6.8% in 2012, and 7.1% in 2013, compared with our previous projections of 7.1% and 7.3% respectively.
We have made some
significant adjustments to our current account estimates, based on year-end data for 2011 from the Central Bank of Nigeria (CBN) which differ markedly from interim statistics provided by the National Bureau of Statistics. We now foresee the surplus reaching 9.6% of GDP in 2012, compared to previous projections of 16.9%.
Key Risks To Outlook
The volatility in the price of oil poses a significant risk to export revenues and government receipts, a fact starkly illustrated with the sharp downturn seen in Q212. A significant deterioration in the economies of Europe, the US, or other major markets could see the price again head lower, with negative implications for Nigeria´s economy.
While we believe that security risks will eventually be contained, if the situation significantly deteriorates, this would potentially adversely affect investment, exports and growth.
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